Crosswords0 min ago
Do We Pay Off The Mortgage With Our £85K
17 Answers
Hi folks
We are due to receive £85k lump sum for the sale
of my husbands old house. Currently we have a mortgage on this property for £108k (outstanding).
Which way would you go with this - put the £85k off the current mortgage to reduce it by just over £500 per month or invest in a savings account where we could get approx £180 a month on interest?
If we did put off the mortgage, is there an insurance policy you can pay into in the event of one of us dying were you get a lump sum on "the death of a partner". Sorry to be morbid there!
We are due to receive £85k lump sum for the sale
of my husbands old house. Currently we have a mortgage on this property for £108k (outstanding).
Which way would you go with this - put the £85k off the current mortgage to reduce it by just over £500 per month or invest in a savings account where we could get approx £180 a month on interest?
If we did put off the mortgage, is there an insurance policy you can pay into in the event of one of us dying were you get a lump sum on "the death of a partner". Sorry to be morbid there!
Answers
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I know that it's always nice to pay off debts, etc, just in case you get into financial difficulties etc, but at the end of the day, wouldn't it depend on what your interest rate is on your mortgage ??
Most mortgages would prob be charging you more than you could get if you put the money into a savings account instead ..... but not all of the time.
We're lucky - out mortgage is 0.75% above base rate, so our mortgage rate is currently 1.25%, so if that was us, we'd be looking to invest it in a high interest account rather than pay the mortgage off, as we'd be hoping to get around 3% in a savings account.
Most mortgages would prob be charging you more than you could get if you put the money into a savings account instead ..... but not all of the time.
We're lucky - out mortgage is 0.75% above base rate, so our mortgage rate is currently 1.25%, so if that was us, we'd be looking to invest it in a high interest account rather than pay the mortgage off, as we'd be hoping to get around 3% in a savings account.
Pay off a chunk of your mortgage and buy another property to let. That way you will save on your mortgage and have an investment for the future that will be funded by someone else (a tenant). You will still have all your assets and more in a few years time. You could call a BTL a personal pension plan.
If you have no other outstanding debts – paying off the mortgage will give the best guaranteed return (even in these times of low mortgage interest rates). However I would strongly recommend you keep enough in reserve to tide you over for a minimum of 6 months, or better still a year, to cover a worst case situation of you loosing your regular income.
My other advice is to spend some of it on life’s luxuries – a holiday or a newer car (but don’t waste it on a brand new car).
My other advice is to spend some of it on life’s luxuries – a holiday or a newer car (but don’t waste it on a brand new car).
After I was made redundant from BC the first thing I did was pay my mortgage off. it's surprising what you can do when you don't have that bloody great bill round your neck, for instance you can look for jobs you enjoy not the ones that pay the most and as somebody has said earlier if it's paid for you don't have to worry about being repossessed and if the worst comes to the worst you can always re-mortgage.
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