Outstanding Mortgage Debt = Savings

H

HappyH

Guest
Hi, new guy here, had a look round the forum (looks great) but can't find an answer to my question, hopefully one of you knowledgeable folks can advise.

Right now I've a small outstanding mortgage but have money in a savings account which I could use to pay off the mortgage. Interest rate on the savings is approx same as the mortgage interest rate. Should I use the savings (still keeping my rainy day fund) to pay off the outstanding mortgage.

Married, 42, 8 years term left on mortgage. If I pay the mortgage off I'd put the equivalent monthly mortgage payment into savings.

Any advise much appreciated.
 
I would clear the mortgage. My reason for saying this is that mortgage interest rates are rising and your 'small' mortgage this year will cost you a lot more by next year!! Presumably you're paying DIRT tax on savings too so although you'd lose TRS, this is probably relatively small in relation to interest charged on mortgage. I'd probably reconsider if I did not have a Rainy Day Fund. There's a lot to be said for the peace of mind being mortgage free gives IMO.
 
HappyH said:
Right now I've a small outstanding mortgage but have money in a savings account which I could use to pay off the mortgage.
Click to expand...

If you use you savings to pay off mortgage, would you still have some money for "rainy" days?
It is all about getting the correct balance between assets and cash flow...
 
Thanks very much for the advice & prompt replies. I must admit the attraction of being mortgage-free is swaying me that way.
Bacchus, yes my 'rainy' day fund would be left intact.
Thanks again.
 
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