Pay off Mortgage/invest

[glennboltw]

I owe about 50k on my Mortgage and I'm due to inherit about 80k, should I pay off my Mortgage in full or invest the money? 

Edited July 8, 2023 by glennboltw

[captainmed]

15 minutes ago, glennboltw said:

I owe about 50k on my Mortgage and I'm due to inherit about 80k, should I pay off my Mortgage in full or invest the money? 

Depends on your mortgage rate.

The £80K can earn you 6% (£4800) per annum in a fixed rate saver/bond. 

[TrickyTrotter]

Also depends on your marginal tax rate.  

As the Captain said you can get almost 6% gross on savings (8.5% in your local club's Bond😁), but if it's not in an ISA you'll have to pay tax usually on your interest.  

[glennboltw]

So for 40k @ 4.5% until April 2028

And 11.5k @2.59%till October 2025

[Nowack]

Assuming you will get charges for paying early the general consensus when we got financial advise is invest. We have 4 years left at 1.5% though.

[glennboltw]

3 minutes ago, Nowack said:

Assuming you will get charges for paying early the general consensus when we got financial advise is invest. We have 4 years left at 1.5% though.

Yeah I get charges to pay off early, I can pay off 10% without any charges.

[Biggish Dave]

Invest a few hundred quid and see an IFA who will give best advice specific to yourself rather than asking here

[glennboltw]

1 minute ago, Biggish Dave said:

Invest a few hundred quid and see an IFA who will give best advice specific to yourself rather than asking here

Yeah that's what I will probably end up doing, I just want to get an idea in my head of the kind of things I should be thinking of and if there was  a "general rule of thumb".

[Biggish Dave]

There's no 1 fit all unfortunately. Depends on attitude to risk as much as anything.

Having no mortgage is worth far more to some people rather than earning more interest in anything from a risky investment to safe bond.

I personally would rather own my home outright to the detriment of earning interest, even if there was a bit of a penalty for doing it.

Others would rather pay off the 10% and invest the rest until they can pay a chunk off again without penalty.

Paying off my mortgage was my best decision for me at the time though not for overall wealth

[Tonge moor green jacket]

Advantage of mortgage going would ward off any further rate rises- savings don't seem to increase as fast.

Then again, I don't see rates so high for too long.

If I had a little bit of cash available to take a risk, I'd be interested in shares in companies developing the new type of solid state batteries etc.

As these start to revolutionise life span and charge density, they're going to be valued for domestic, industrial and transport applications. 

[royal white]

Bitcoin 😜

[RoadRunnerFan]

I'd second Biggish's advice and say see an IFA (where you pay for their time not by commission). If you do decide to invest some, low cost, broad based index funds are usually more suited to a beginner investor than taking a punt on individual stocks or sectors. 

[little whitt]

16 hours ago, glennboltw said:

I owe about 50k on my Mortgage and I'm due to inherit about 80k, should I pay off my Mortgage in full or invest the money? 

all depends how long you got left on it 

if say 15 years  you will prob pay Something like  100k on the 50k you owe

if it was me i would pay it off you will still have 30k to invest / play money 

you can always start investing the  xxxx amount you pay every month In Mortgage Payments 

[Casino]

In our case it was very much an emotional decision so possibly not one that made sense, so we paid ours off

Just under 10 years left and interest rates were low

Just nice to know we werent paying 400 every month

[Carlos]

I'm not paying my mortgage off, I could, but I've got 2 years left at 1.7% or something. Banged it in an savings account paying way more than that. Easy. Stopped overpaying for the same reason.

[Ani]

All depends on your circumstances. 
 

We took money out of Pension to pay ours right down, that was based on the monthly payments starting to eat into our monthly 'spending money' 

if you can pay off 10% with no charge I would be tempted to do that and then invest the rest but have some with easy access and pay another 10% of next year. If you get a charge of paying early it will quickly reduce the value of your repayment. 

[Sweep]

16 minutes ago, Carlos said:

I'm not paying my mortgage off, I could, but I've got 2 years left at 1.7% or something. Banged it in an savings account paying way more than that. Easy. Stopped overpaying for the same reason.

That's the ideal scenario right there

[globaldiver]

If you’re a higher rate taxpayer, pension contributions would be compelling.

Psychologically, it might feel pretty good to get your mortgage paid off.

[Sweep]

1 minute ago, globaldiver said:

If you’re a higher rate taxpayer, pension contributions would be compelling.

Psychologically, it might feel pretty good to get your mortgage paid off.

Indeed, that's what is be looking at for a chuck of it I think. Although, as stated above, it depends on each individuals circumstances 

[kent_white]

22 hours ago, glennboltw said:

I owe about 50k on my Mortgage and I'm due to inherit about 80k, should I pay off my Mortgage in full or invest the money? 

Spend it on cocaine and whores

[Sweep]

25 minutes ago, kent_white said:

Spend it on cocaine and whores

And then waste the rest

[dave2980]

30 minutes ago, Sweep said:

And then waste the rest

On a stint in rehab only to relapse within a week of leaving? 

[Spider]

Do NOT invest in any European companies or stocks.

Keep it all in Britain.

Patriot🇬🇧

[Biggish Dave]

Give it a rest ffs

[Spider]

50 minutes ago, Biggish Dave said:

Give it a rest ffs

🎣 🎣🎣