Well to hear the banks complain about them you might think that they are a problem. I can pay off my 80k over the next 7 years or tomorrow. Should I clear everything tomorrow, I guess that the bank could gain massively more than the .65% they are currently getting from me! I do not pretend in any way to understand banks or lending BUT .65% for next couple of years from me or 4%+ lending by the bank to others???????? Cannot make any sense of itI don't think tracker mortgages are as costly and problematic to banks now as they were a couple of years ago.
So is your advice to pay off the mortgage at this time? This seems to go against any other advice I have seen on this forumMy advice in this case is do what is right for yourself. Forget about trying to second guess the bank. Be happy with your lot and the fact that you can pay off your mortgage if you choose. .
If you're in good shape financially the comfort of knowing my mortgage was fully paid would be music to my ears. No real downside either way as long as you don't risk the 150k or too much of it.
Personally, my approach would be to save it in an account that offers more than 0.70% after DIRT, until such a time as interest rates make it more beneficial to pay it off in full (as you said yourself).
Absolutely agree but I don't think there are currently any instant access deposit accounts that will pay more than 0.7% after DIRT and fees (where applicable). Any other investment option (including longer term savings bonds/certs) involves taking more risk than simply paying off the mortgage.
If it was me, I would pay off the mortgage, keep roughly 3-6 months' expenses in a Rabo direct instant access account and the balance in 4 year NSBs. Make sure to maximise all pension contributions/AVCs where possible and maintain an appropriate allocation to equities within the pension wrapper.
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