If the liquid cash is something you have available, then highly consider paying of your mortgage early. In most scenarios a mortgage is the biggest debt anyone has outstanding, and to get rid of this would allow money to be put into better use like investments.
using low mortgage rates
One of the main factors taken into making the decision of early repayment is the interest rate and also inflations levels. If the mortgage is on a tracker, then currently you will be paying a low mortgage rate which means that liquidity has been generated, as before when the interest rates where slightly higher, the monthly repayment would have been higher as well.
Seeing as the repayment is now lower, if you were to carry on paying back the previous higher amount you could benefit from great savings. This can be seen in example 2.
early repayment example 1
A simple example of paying back you mortgage early is:
Imagine you have a �100,000 mortgage taken out, over a 25 year term, which is a common term time for mortgages, at an interest rate of 7%. By paying �109 more a month on top of what you a currently paying, could potentially decrease the term by 7 years along with a saving of �45,885.
early repayment example 2
With the previous interest rate of 7% repayment was at �707 monthly, and by interest rates dropping to 4% monthly repayment will drop to �528.
By increasing the payment by �100, so �628 a saving of over �10,000 and 6 years would be made to the mortgage approximately.
With much flexibility given to mortgages such as interest calculated daily, unlimited overpayments without charges and no early repayment charges, it is up to you as a borrower on how to use them to make most savings. To find out about recent developments in the mortgage calculator market go to the mortgage calculator news service.