If you had £30000 to invest...

RichardB1

...where would it go? Lets say you have a £50k mortgage, and no other debt to pay off, where would you invest it?

Aegis

RichardB1 wrote: »

...where would it go? Lets say you have a £50k mortgage, and no other debt to pay off, where would you invest it?

I'd very seriously consider paying off most of the mortgage. My reason for that is simply that I prefer regular investments to lump sum, and I'd therefore have to work out how best to phase the lump sum into the market if that was what I wanted to do with it.

I might choose to invest some of it, but I'd have to assess my whole financial situation to see what made the most sense.

JoeCrystal

If I was the one who inherited £30,000 and a mortgage of £50,000 with no credit or student loan. I would establish an emergency fund that is capable of paying the mortgage and all bills for entire year in some good saving account (in case of loss of job or lessen income) and then depending on how the repayment work for your mortgage, pay the mortgage with leftover. While paying the mortgage off with £30,000 sound appealing, you need to take more important considerations like expenses in case of no incomes. Which is more important in short term, the ability to stay in your own home and keep paying the bills for a year or so while you find another job in case of unemployment or paying the mortgage with £30,000.

I does have an emergency fund which is not part of my 'Savings' which is capable of maintaining my rent and bills for a year (which comfort me a lot in case of losing my job).

pbw

£30k savings with a 50k mortgage

3.6k would go into an ISA straightaway @3.61% (Barclays)

26k in a 5 year icici paying 4.4% (3.52% net) getting £76 monthly interest into my current account.

£400 in yorkshire building society web saver @2.10% (1.68% net)

this is of course assuming the morgage is less than 3.52%. if more than 3.52%, put the 26k into the mortgage...

Aegis

pbw wrote: »

£30k savings with a 50k mortgage

3.6k would go into an ISA straightaway @3.61% (Barclays)

26k in a 5 year icici paying 4.4% (3.52% net) getting £76 monthly interest into my current account.

£400 in yorkshire building society web saver @2.10% (1.68% net)

this is of course assuming the morgage is less than 3.52%. if more than 3.52%, put the 26k into the mortgage...

What if interest rates were to rise? Unless your mortgage is fixed at a low rate, locking the money up for 5 years could be pretty bad news unless you can take the money back at some point during those 5 years.

pbw

i should have been more specific. my mortgage is on a tracker of +0.69% above base. therefore, my mortgage rate is at 1.19%.

in my case, for my mortgage rate to be higher, there has to be a 2.5% rise in BoE rates. i don't see that happening for many years to come...

p00hsticks

pbw wrote: »

£26k in a 5 year icici paying 4.4% (3.52% net) getting £76 monthly interest into my current account.

Is this a fixed rate ? Because personally I wouldn't want to be locking anything away for five years at that low a rate.....

jamesd

How much are you willing to risk losing temporarily during a year or two before recovery? If the answer is 70% then you could put it all into an emerging market fund like Allianz RCM BRIC Stars and perhaps make 10% in a week or two, then switch gradually into lower risk investments to protect any gains. Of course, you could lose 10% or more in a week or two as well... no guarantee.

For less potential gain or loss there are a large number of funds available with widely varying risk properties.

malik999

RichardB1 wrote: »

...where would it go? Lets say you have a £50k mortgage, and no other debt to pay off, where would you invest it?

If i was in your shoes simple maths would answer this for me.

I would put the 30k into a savings account or bond (no more than a 1 year fixed term). possibly £3600 of it into a ISA 'IF' the interest rate on the savings, taking into account tax, was less than my mortgage interest. If not I would pay the 30k straight off my mortgage.

HTH

slinga

I've got 72K to put somewhere as I'm liquidating some low interest UTs.
I'm going to put 40K back into better?? UT's and 32K into an Automobile Association account at 3.75%.

Can I do better than the AA???????????

Baldur

slinga wrote: »

Can I do better than the AA?

http://www.moneyfacts.co.uk/money/savings/1/short-term-fixed-rate-bonds.aspx

http://www.moneysupermarket.com/savings/

http://www.fsa.gov.uk/tables/bespoke/SavingsAccount

One of the best 1 year rates is the West Brom - http://www.westbrom.co.uk/westbrom/savings.product?id=4564&FROM_CAMPAIGN=true&CAMPAIGN_SRC=HOME_PAGE