“As part of one’s personal financial plan, I believe in having 3-6 months living expenses saved up and easily accessible in case of an emergency.

“My wife and I have saved extra funds into our mortgage bond and estimate that the value of the additional capital we have paid off is around 21 month’s current living expenses. I see that as part of our emergency fund.

“How likely is the bank to cancel or limit an access facility? If likely a risk, then I’d rather withdraw 3-6 months living expenses and transfer to a separate savings account. Which option would you recommend?” writes James.

Maya replies: Personally I prefer to have my emergency savings separate as paying off my bond as it is a separate goal to my emergency savings. I have four months of living expenses in a money market account but also pay extra into my bond. Sometimes it is better to have separate goals so you know exactly where you stand financially. If your goal is to have your house paid off by a certain date then tapping into that for emergencies will affect that goal.

However this is a personal decision and I have certainly never heard of a bank cancelling an access bond so you should have access to those funds.

I just hope that in addition to paying off your bond you have long term savings – don’t mix up the goal of paying off your house with long-term retirement savings. Remember you can’t eat your house in retirement! If the market returns 12% over the next twenty years (historically it has been between 15 – 18%) then aggressively paying off your mortgage is not necessarily the best long-term investment.

That said, reaching a point in your life where you start the month with no payments due on your home is a good financial goal, it is about finding a balance so just make sure you are on track with your retirement savings as well.

This article first appeared in City Press