Pay off some of my mortgage with investment, or not?

Scarum

Hi

I have been receiving tips from this great website for over a year but have yet to join the forum, so here I am with my first poser.

I am a single man (soon to have my girlfriend to move in with me), aged 35, I have a small mortgage of £27,000 on a house now worth £155,000. The mortgage term remains at 17 years now. The payments are £192 a month and month-to-month I never have cash flow problems.

I have a shares ISA with Invesco Perpetual worth a little over £4000 now. Recent news is revealing that shares are falling with warnings on inflation rises.

I am aware of the long-term benefit of shares investments (I have had this ISA for 6 years now in which time it has doubled). But I am thinking this could be a good time to reep its gains and pay off some of my mortgage, thereby reducing the term to pay it off.

I have some cash savings which I use for a “rainy day” or for house improvements or emergencies. I am switched on when it comes to managing money but wondered what are others fellow forum members views on this idea to pay off some of my mortgage with the ISA.

Regards

Marcus

Scarum

Bump*bump*bump*bump*

dunstonh

Recent news is revealing that shares are falling with warnings on inflation rises.

There is always periods of decline. Equity investments are volatile which is why they are a long term average. A half decent spread of sectors invested prior to the 2001 stockmarket crash would show an average return around 15% p.a. now despite showing around a 30% drop in 2001.

But I am thinking this could be a good time to reep its gains and pay off some of my mortgage, thereby reducing the term to pay it off.

Possibly a bit late now with most of the frowth blown off the markets.

I have some cash savings which I use for a “rainy day” or for house improvements or emergencies. I am switched on when it comes to managing money but wondered what are others fellow forum members views on this idea to pay off some of my mortgage with the ISA.

Many people have a mortgage and investments. I could pay my mortgage off with my investments but I accept the short term volatility in exchance of the potential for long term growth which should exceed the mortgage interest that I pay. If you accept that risk and reward potential then there is no reason to pay the mortgage off.

Joe_Bloggs

Small but regular overpayments can do the same job if they are allowed. Were you to overpay by £130 a month you could cut the mortgage term in half. This would save around £6800 in interest payments when compared to the original term. It is your money after all.
J_B.