So, I'm one of the lucky ones! My wife and I made a decision to pay off our mortgage early. We started off just doing small over payments - a tenner here, twenty there, that kind of thing...
We soon realised just how quickly you could get it down! So we made a bit more of an effort and now - no mortgage :) Well, that's not strictly true. We left a tiny amount in there to pay off to keep it alive in case we need it for something else down the line. Maybe moving (Vancouver I hear is nice??) or whatever.
Anyway...to the point...
Our mortgage rate is currently at 0.5% and we have a savings account that, for 12 months, is at 2.5% (an instant access type of thing - with sainsbury's believe it or not). As our mortgage allows a drawdown (or equity release) on it - it seems logical to release say £10,000 or a sum we feel happy with and stick it in the savings account for 12 months.
Now I'm no mathmetician, as many of friends will tell you, but even when tax is taken out of the 2.5% that £10,000 must be making me money - isn't it? The mortgage is costing me 0.5% and the savings account is making me 2.5% less tax. Am I missing something or is this a win/win situation for me?
Well...time will tell as to what we end up doing and I will keep you posted ;)
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