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  • FIRST POST
    • Running on empty
    • By Running on empty 30th Sep 17, 4:12 PM
    • 10Posts
    • 2Thanks
    Running on empty
    Conundrum
    • #1
    • 30th Sep 17, 4:12 PM
    Conundrum 30th Sep 17 at 4:12 PM
    Hi forum posters,
    We have a bit of a savings/mortgage related conundrum which we can’t quite work out.
    We have £35k chunk of mortgage (added from a house move) which we can pay off from £40k of Premium Bond savings we have worked up.
    We pay base rate +0.99% on the mortgage with 18 years to go. We also have life insurance on it (so an argument that should the worst happen we are covered anyway).
    So, our conundrum is should we keep saving and paying the mortgage back on the £35k chunk, or would we be better paying off the £35k chunk - but then losing our nest egg of savings....? Indeed, are there any suggestions people might have that we haven’t considered?!
    All advice appreciated - thanks in advance. :-)
Page 1
    • Miss Moneysaver
    • By Miss Moneysaver 1st Oct 17, 2:56 PM
    • 193 Posts
    • 136 Thanks
    Miss Moneysaver
    • #2
    • 1st Oct 17, 2:56 PM
    • #2
    • 1st Oct 17, 2:56 PM
    Hi,

    I'd use your Premium Bond savings to pay off the £35K. I would then start saving up again. To be mortgage free would be wonderful!
    Interest rate 1.25%, offset mortgage Woolwich

    Mortgage balance £37k October 2017
    • Running on empty
    • By Running on empty 8th Oct 17, 12:04 PM
    • 10 Posts
    • 2 Thanks
    Running on empty
    • #3
    • 8th Oct 17, 12:04 PM
    • #3
    • 8th Oct 17, 12:04 PM
    Bump
    • pawlala
    • By pawlala 8th Oct 17, 2:55 PM
    • 1,212 Posts
    • 3,224 Thanks
    pawlala
    • #4
    • 8th Oct 17, 2:55 PM
    • #4
    • 8th Oct 17, 2:55 PM
    Hi,

    I'd use your Premium Bond savings to pay off the £35K. I would then start saving up again. To be mortgage free would be wonderful!
    Originally posted by Miss Moneysaver
    Take this advice. As Arnie would say, "Do it nooooooooow"
    Mortgage free: New Year's Eve 2013!
    Mortgage free II: Est. Dec 2019
    • beanielou
    • By beanielou 8th Oct 17, 8:33 PM
    • 47,681 Posts
    • 172,874 Thanks
    beanielou
    • #5
    • 8th Oct 17, 8:33 PM
    • #5
    • 8th Oct 17, 8:33 PM
    Why dont you go half & half?
    Best of both worlds then.
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~** **Weight loss 2 stone 2 lbs **

    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.*** ***Keep plodding***
    • museumworker
    • By museumworker 8th Oct 17, 9:38 PM
    • 1,942 Posts
    • 11,008 Thanks
    museumworker
    • #6
    • 8th Oct 17, 9:38 PM
    • #6
    • 8th Oct 17, 9:38 PM
    What a wonderful situation to be in! As long as you don't squander it I think you're fine.

    As you're asking on the MFW thread you'll mostly get told to pay it off.
    I would consider your overall financial savings and goals e.g. Do you want to be financially independent by a certain age? Or want to buy a bigger house / reduce working hours etc. What other savings do you have?

    If I had £35K right now I would have £5-10K in bank accounts that pay up to 5%, have a bit of premium bonds (cos I'm convinced I'll win a million); start investing regularly in a low cost S&S index fund, and pay off a bit of the mortgage.
    Mortgage 16/03/2011: £190K 01/01/2017: £107,729.65 01/07/2017: £95,979.89
    OPs 2011-2016 = £45K 2017 OPs = £9250.20
    • Running on empty
    • By Running on empty 9th Oct 17, 6:09 AM
    • 10 Posts
    • 2 Thanks
    Running on empty
    • #7
    • 9th Oct 17, 6:09 AM
    • #7
    • 9th Oct 17, 6:09 AM
    Thanks museumworker,
    You are spot on there, we’d have £180k left over (18 years to go) if we paid that lump off. We have £10k left in premium bonds & £10k in a S&S ISA too, but no real lumps in bank accounts. We were going to keep these going and either overpay on the mortgage each month or out that money back into these each month.
    Our main aim is to be financially independent by the time we hit 60 (15 years to go), so we can look at retirement or going part time.
    Thanks a lot (and point taken on the forum as well!).
    Thanks
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