is there any reason i should not pay off my mortgage

[mandimoo]

i owe approx 7500 and paying 2.5% interest.
i rent this property out, so have to pay tax on the unearned income.
can any one tell me the calculation to work out if it is a good idea to pay off the mortgate (and thus lose the tax relief on the mortgage interest)?
or give me any advice on if i should or shouldnt pay it off?

[bookbinder]

My wife and I paid off our mortgage many years ago, by paying extra whenever possible. We reckoned that we were on the winning side by having done that. OK, you lose the tax relief, but you're not making any more monthly payments, so that must be a plus point. And, the house is yours, so nobody can take it away from you.

[R1Geezer]

Well assuming we are talking about interest only, you are paying £187 per year in interest. You can offsett that as an expense so you are saving tax on £187, let assume 40% so that would cost you are saving £74.80 in tax possibly less depending on your status. I would say on these figures you should pay it off.

[boxtops]

There's been no tax relief on mortgage interest since 2000 when it was abolished - so you'll not be saving any tax concessions by paying off the mortgage.

[craft1948]

I assume mandimoo means the tax on his profits from the lease.

[MarkRae]

> so nobody can take it away from you.

http://en.wikipedia.o...ulsory_purchase_order

[boxtops]

Mandimoo does actually say "lose the tax relief on the mortage interest" not the "tax on the unearned income".

[boxtops]

sorry markrae, what's your link got to do with paying off a mortgage early?

[237SJ]

Miras was abolished years ago so there`s no point in keeping a mortgage going like you used to. When I had a repayment buy to let mortgage the interest was deductable from the income as an expense so I think R1Geezer is on the right track.

[R1Geezer]

Oh dear Boxtops and co,.
Interest on let properties counts as an adjustable expense, nothing to do with the old Miras. Sadly there is no tax relief on a private mortgage for your own house but you get relief on all the interest and other expenses if you are letting the property.

[mandimoo]

i meant that i have to pay tax on the profit from renting the property, and interest ive paid on the mortgate reduces what i need to pay, so I guess thats an expense. its not a buy to let, but i moved in with my (now) husband so decided to rent it to pay the mortgage because i didnt want to sell it. sorry that the incorrect terminology caused some confusion, but i reckon im gonna pay it off. yay!

[R1Geezer]

Buy o let is irrelevant, you can still offset interest as an expense if you let it, I'd say my original recomendation is still correct.

[society]

Boxtops & Co? lol

I do see Mark's point, but, I'm guessing that could happen to your property by a long shot.