My (UK) home mortgage renews April 2023.<p>Current mortgage is fixed at 1.68%.<p>The products I could remortgage on to from my existing bank are offering on a 2 year fixed term are around 4-5%. The wider market is showing about 4%. The Bank of England base rate is currently 3.5%.<p>I think it's a no brainer to pay off the mortgage (or at the very least significantly reduce the size of the mortgage).<p>No low risk investment (savings, bonds) is going to return more the cost of the mortgage.<p>What are people's thoughts? Are we going to see a lot of mortgage defaults next year? How high will central interest rates go?
In the US, we get to deduct mortgage interest from our income when paying income tax. Do you get to do that in the UK? If not, then things weigh even more heavily toward paying it off, because to break even, you'd have to earn enough on your investment to pay the income tax on the income, and <i>then</i> to pay the mortgage interest. You're not going to get that with any safe investment.