We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The value of cash
Options
Chris_h_4
Posts: 33 Forumite
Background
Me and my partner are considering building a new house in a year or 2. We are therefore saving heavily to hopefully put us in a position to be able to do this. We already own a house which we would expect to sell as part of the financing.
My plan
I am conscious that throwing our savings at our existing mortgage (a capital and interest policy that allows unlimited additional payments) would provide the best return on our cash. However, my thinking is that we should hold all our new savings in cash (probably 1 year fixed ISAs / savings plans for the next 12 months then something more flexible) so that we actually have as much cash as possible in our hands when the time comes, as opposed to having it tied up in our house.
My question
Is this a sensible approach? Is there a sensible limit (perhaps based on expected cost of house build / land, say) above which new savings could confidently be thrown against our existing mortgage?
Regards
Chris
Me and my partner are considering building a new house in a year or 2. We are therefore saving heavily to hopefully put us in a position to be able to do this. We already own a house which we would expect to sell as part of the financing.
My plan
I am conscious that throwing our savings at our existing mortgage (a capital and interest policy that allows unlimited additional payments) would provide the best return on our cash. However, my thinking is that we should hold all our new savings in cash (probably 1 year fixed ISAs / savings plans for the next 12 months then something more flexible) so that we actually have as much cash as possible in our hands when the time comes, as opposed to having it tied up in our house.
My question
Is this a sensible approach? Is there a sensible limit (perhaps based on expected cost of house build / land, say) above which new savings could confidently be thrown against our existing mortgage?
Regards
Chris
0
Comments
-
What interest rate are you paying on your mortgage? How does this compare with what you can earn after tax by saving?0
-
Sorry for delayed response G_M...
We are paying 2.5% on mortgage at the moment. This is a permanent deal for 2% above base rate. So similar to what can earn on normal cash savings for now.0 -
I would say savings as this could give you a better return.Work in progress...Update coming July 2012.
0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 350.6K Banking & Borrowing
- 253K Reduce Debt & Boost Income
- 453.4K Spending & Discounts
- 243.6K Work, Benefits & Business
- 598.3K Mortgages, Homes & Bills
- 176.8K Life & Family
- 256.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards