Wise to pay 20k off Mortgage?

[mad m]

I have about 20k in savings at present, with a mortage from Bank of Scotland under 170k...Wondering would it be wise to pay 20k off mortgage or am I wasteing my time?

 

[Padraigb]

First, do the sums. What interest are you paying on your loan? What return can you get on your savings?

If you still think it might be worth reducing your mortgage, ask yourself if you need any kind of financial buffer -- say, for example, if you don't have 100% job security.

 

[mad m]

Job seems pretty safe, but whats safe in this climate! On a tracker mortgage at present within 0.5% from ECB. I know it probably won't make a real dent in repayments but was wondering would it be better shifting it off mortgage rather than have it in a bank, especially the way the banks are these days.

 

[irishlinks]

If you don't need instant access to the 20k - put it in a fixed rate account for a year . Your tracker mortgage is soon going to be 2% (probably) - so if you can get over 4% for a year on the savings you will be making more in interest after DIRT than you would by paying it off the mortgage. You can get 4.5% at Halifax or 5.25 at Anglo Irish .