To reduce mortgage now or hold onto money

[JohnnyBoy]

Hi there,
I'm looking for a bit of advice.
I'll be in a position before the end of the year to pay a bit extra off the mortgage.However I'm thinking about taking out a bigger mortgage in acouple of years.
My q is,should I hold onto my money now to fund a deposit in a couple of years,because I'm wondering that the banks will be reducing the size of their loans or should I reduce my current mortgage,thereby persuading the bank that I'm a "safe risk" & that they would give me a bigger mortgage.
Thanks

 

[LDFerguson]

Assuming you're planning to sell your current house in a couple of years, I'd pay off the mortgage now. In most cases, you'll get a poorer rate of interest on deposit than you're paying on your mortgage.

Size of mortgage is mostly connected with your earnings and other monthly outgoings.

 

[The Banker]

You may find it easier to get a bigger mortgage from a Bank in a couple of years by having savings at that time rather than having paid off some of your mortgage a few years previously, particulalrly if you decide to use a different nortgage provider to your present one. Banks like to see someones ability to save and they like to see someone put cash into a deal that they are putting cash into.

you may be able to get a long term deposit rate as good as your mortgage rate.