New lower mortgage rate, pay lump sum or not?

[Bomtek]

My missus got a sizeable rebate from the taxman (makes a change) and we were wondering wether it would be worth using it to pay off part of the mortgage.

At present, our mortgage payments have been the lowest since when started it due to the reduction in interest rate. Our we better to leave the mortgage alone whilst the rates are low and pay off a lump sum later when the rates go up or should we pay off now?

Any advice is appreciated.

Thanks.

[coin-op]

Pesonally I' do my best to reduce the outstanding balance every time.
There are no certainties in life so if you owe feck all on your property and you (say) lose your job and have to take a lower paid one (Like I did a few years ago), your payments will be lower and you will feel moe comfortable with that. If you hang onto it I'd wager little bits will keep getting spent on things you perceive a need for, and if the shit hits the fan later you won't hve the brass anymore.

[blacksheep]

Depends if you will touch it (as above) and if you can find a bank account that (after tax) will give you a better return on your money than what you're borrowing is costing you.

[wakadoo]

u need some proper advice on this m8, dont just guess it..

i did ask at the bank about the lower intrest rate and left my payments the same cos the adviser said paying the same with lower rates is better long term so go get so good advice as it will make the diff between a good investment or poss waste of money..

[jaguar982]

It depends if you think you may need the money in the future once you pay it off you may leave yourself with nothing to fall back on take impartial advice dont rush

jag

[Bomtek]

Cheers for the advice.

I have had a quick look around and there are some savings accounts which will give 7%+ but I think these are for regular monthly savings (up to £250 per month). I doubt we would get the benefit of paying in the money in £250 installments into such an account.

I'll keep looking and see what else I can find. I'll give the mortgage people a call to see what they say.

Thanks.

[jaguar982]

London and County 08009530304 they will give impartial advice

jag

[wadgey]

Also check to see what the maximum lump sum payment you can make is. In most cases I think you can make upto 10% of the remaining balance in overpayments.