Paying off (most of) my mortgage with inheritance

beecher2

I think the best bet is to save the money until your tracker ends at the end of the year as you will be able to get a better savings rate than 1.5%.

JA1000

STOP - At that rate do not pay it off, you will get a better return elsewhere which will cover the interest.

And you might actually want to spend some of it, this web site is all well and good about saving money but it would be nice to hear a bit more about some people blowing it on fun, new car etc. I am not saying blow it all but think about what else you might need or want!!

BenG1

HA HA! Good point JA.

I AM taking the girlfriend on holiday in a couple of weeks with some of it.

JA1000

I meant be selfish with it, don't waste it on others!!!!

dimbo61

The abbey/santander SVR is 4.24% at the moment so yes go and have a good holiday and fill your cash ISA,s but consider using most of the money to clear a large part of your mortgage.
Did the person who left you this money want you to clear your debts/mortgage?
I would change whats left of the mortgage into a repayment mortgage and try and clear that in 3/5 years ( only my opinion ) GOOD LUCK

BenG1

That's pretty much what I had in mind, dimbo. As for whether or not my dad wanted me to clear debts/mortgage, I think he would have wanted me to not squander it. I don't see this as squandering it!

Cheers.

JimmyTheWig

If you are remortgaging then you need to look for a product with low or no fees attached. These may dwarf any good looking interest rates.
Probably best just to stick on the SVR, as you'll pay no fees to do this.

Agree with post #12. Assuming you can get better than 1.5% NET (i.e. after tax) returns on your savings then stick it in the bank until the tracker ends. Then use it against the mortgage.
Agree with other posters that you'd be sensible to keep 6 months+ income in savings. (And if things are serious with your girlfriend then I would keep a significant amount set aside for a ring when the time comes!)


Annoyingly, even if you keep up your repayments at the same level as you are paying now it will still take about 10 years to get mortgage free.
Or have I done something wrong. Can someone check??

jamesd

You mentioned considering doing something other than paying off the mortgage, like investing. Have you considered a selection of unit trusts? There's no shortage of those available that are paying four to eight percent and couple of higher risk ones paying more. There's even one building society PIBS (permanent interest-bearing share) paying over 10% at the moment. We're also probably in the second year of a several year recovery in stock markets.

Given those possibilities, you might consider discussing options with an IFA and doing something like taking out 10% of the investment value each year to go towards paying off the mortgage. That way you have a good prospect of growth in value and still end up clearing the mortgage a lot more quickly.

JimmyTheWig

jamesd wrote: »

Have you considered a selection of unit trusts?

While I can see the benefit of doing this, would you suggest to someone with a 10% LTV mortgage that they should mortgage up to 90% and invest the proceeds?
Surely that is the equivalent as the suggestion to invest this money here.

BenG1

JimmyTheWig wrote: »

While I can see the benefit of doing this, would you suggest to someone with a 10% LTV mortgage that they should mortgage up to 90% and invest the proceeds?
Surely that is the equivalent as the suggestion to invest this money here.

It IS a nice idea, but I'd be lost doing it and it's a little more complicated than I want to deal with right now.

The choice I have now is to stay on the tracker til it expires and think about it again then or to start looking right away for a remortgage to get on to repayment with only 10-20k to pay off.

I'm still pondering...