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The Guardian - UK
The Guardian - UK
Business
Virginia Wallis

Should I pay off my mortgage or use the money for a deposit on a second property?

High-rise buildings at Elephant and Castle, Southwark, viewed from Kennington, London, England.
The reader’s property is near Elephant and Castle in London. Photograph: iWebbtravel/Alamy

Q I’m a 42-year-old full-time professional and in a rather fortunate but tricky situation, which I would like your help with. My seven-year fixed-rate mortgage is coming to an end on 2 May 2023, after which I am not sure whether I should remortgage or pay off the balance.

I have about 20% of the mortgage left, which I could pay off as of today. However, I would incur an early repayment charge of just over £3,000, so I think I’d better wait until the fixed deal expires as the charge no longer applies once the mortgage is on a variable rate. If it’s paid off, I’d still have a bit of a safety net of about £10,000 left for any emergency expenses.

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