Best Course Of Action

Imperial1847 · 12 March 2018 at 10:08AM

I am set to inherit £10k and would like to pay some off my current mortgage, owe approx. £30k with 9yrs left to run. My question is do I pay off the lump sum and reduce the years left on the mortgage (I assume it will knock around 3yrs off) or do I pay off the lump sum reduce the monthly payment but keep paying for the remaining 9yrs.

Another factor into the mix is that we need a few home improvements – kitchen/bathroom – did we leave the mortgage as it is and use the cash to get the work done?

Any advice or alternative suggestions would be appreciated.

AnotherJoe · 12 March 2018 at 11:26AM

If your mortgage is an average rate, say around 2% for example, then its less than inflation which is eating away at it every year so i wouldn't be in a rush to pay it off, indeed i wouldn't pay it off.
If you pay that £10k off in 9 years time for example it will only be about £8,000 in todays money. Why pay £10k now when you can pay £8k later?

If you use it on home improvements those are things you'll get the benefit of for the next 9 years. You cant put a monetary value on those but arent they worth more to you than saving about £16 a month in interest? Spend it on those.

Imperial1847 · 12 March 2018 at 11:33AM

That was sort of the way I was thinking, thank you.

Best Course Of Action

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free