Paying Off Mortgage?

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whatsuprob

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I have 35K in a Credit Union Savings Account, and ssia due. I have a mortgage of 90K on a house which is rented and pays for itself. I want to buy land and am waiting for planning, which could take a while yet. Obviously interest form credit union is about 2 percent. and mortgage is 4.7%. Am I better off putting all of my savings into my existing mortgage. Or keeping it to put towards the land?
 
Re: Advice

Bob_tg said:
land
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Surely he can do both. Depending on the time frame for the planning permission you could put the 35K into the mortgage , not pay the interest on it and then release that equity again when you need it for the land.

It would only make sense if you didn't plan on buying the land for another few months.

You'd probs save about 150 quid a month or so! rather than garner interest of about 60 quid.
 
Re: Advice

silvamuppet said:
Surely he can do both. Depending on the time frame for the planning permission you could put the 35K into the mortgage , not pay the interest on it and then release that equity again when you need it for the land.

It would only make sense if you didn't plan on buying the land for another few months.

You'd probs save about 150 quid a month or so! rather than garner interest of about 60 quid.
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I'd be a bit careful about this strategy. Given the current situation re sub-prime mortgages in the US, a global credit crunch could leave the OP unable to release equity when the time comes.

At the very least, the cash is locked up until an equity release can be arranged (several weeks) whereas sticking the cash in a Northern Rock deposit account would earn 4.3%, which is pretty close to what would be saved by temporarily using the cash to reduce the existing mortgage.

But whatever you do, get it out of the credit union!!!
 
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