Hmmm - What to do?

[annie0000]

I currently overpay my mortgage - it's likely to be paid off in the next couple of years - some 16 years early. Woo Hoo! My dilemma is that there is work that i'd like to do on the house that will probably cost around £20k - about the remaining balance on my mortgage at the moment. I would obviously like to that work asap, but I am happy to wait until the mortgage is paid off. That would mean me either saving up from when the mortgage is finished and then it would be another couple of years to wait, or borrowing the money.

Would I be better:
a. stopping overpaying my mortgage now and diverting that money to save so that I could get the work done sooner and pay off the mortgage later.

b. Borrow the extra money against the mortgage now and continue to pay at the same rate and finish paying in 4 years

c. just carry on as I am.

I am not sure which would work out best financially, but also the psychological feeling of having the mortgage paid off is a big draw for me.

I dont intend to stay in this house forever but it would be more comfortable when the work is done and it would sell more easily - I want to replace the bathrooms, so won't necessarily add a lot of value, just make it more marketable.

[R1Geezer]

I would get it paid off and then divert the whole amount you are paying into savings.If you can wait a couple of years for the work to be done you'll save a lot in interest.

[annie0000]

Thanks R1, that would mean waiting about 4 years in total - i'm not sure that I am that patient. I am also not sure how long we want to stay in the house and we would therefore not get the benefit of the improvements. I agree that that is financially the best option and I don't like being in debt - but the bathrooms are really irritating me. I think I am looking for a reason to do them sooner but know that it is not financially the best option :o)

[237SJ]

I suppose it depends how much interest you`ll be charged if you add it to the mortgage now. If you`re on say the variable rate it will be quite a cheap way to get the place done up. If you stop overpaying and divert the money, it could be a while before you get the work done anyway as you`ll have to wait until you`ve saved up. If it was me I`d be inclined to borrow now, get it done so that you can enjoy the benefits and then start overpaying again afterwards.

[dinki]

I would pay it off. We did so a few years ago, then I was ill and cannot work and recently husband lost his job, not having around your neck is a feeling of relief. I find everything is better if you wait and work for it. Who knows what will happen with interest rates, they have to rise sometime.