Should I pay off mortgage with savings

[J&A]

I have just got a redemption figure for my mortgage of €131,490.76 with additional interest €16.57 per day extra. My husband has, in savings, the full amount due. Would we be best to redeem the mortgage or invest his savings?

 

[CCOVICH]

I would say that if you have the chance to be mortgage free in one fell swoop, you should go for it.

Whatever funds you have been using to pay off your mortgage can then be invested going forward.

There are plenty of existing threads on 'invest or pay off mortgage' which can be found by searching/browsing that may be interesting.

 

[rossm]

Interesting question - has anyone looked at this situation taking mortgage interest relief into account. If one had the cash to pay off a mortgage in total would it make sense to pay off only a portion of the mortgage such that the interest on the outstanding amount hit the ceiling for mortgage interest relief. What you are left with is the equivalent of a cheap(er) loan? If the mortgage was then moved to interest only and the capital sum invested the hope would be to get a return greater that the cost.

I know all of the talk about borrowing to invest and investments can go up as well as down but has anyone done the maths around the ideal amount to leave outstanding so as to hit the relief threshold as closely as is possible? and the effect this has on the net (real) interest rate on the amount outstanding?

 

[aircobra19]

if you want a cheap loan.