Invest, overpay or use as deposit?

FuzzyDun1op

We have recently come into approx £20K of inheritance. We are not sure what the best option is to use the money. Our house is currently on the Market. Value approx £120K and a morgage of approx £100K.

Do we;
A) Invest the money in long term savings? But the rate of interest is going to be lower than the interest rate on our morgage.
Overpay on the morgage by the max amount of £500 a month? This should reduce our morgage but would we be just paying off the interest?
C) Keep the money in a savings account so it is available to use as a bigger deposit if/when we sell our house?
D) None of the above?

getmore4less

Are you porting the mortgage?
Do you need to increase borrowing for the new place?

FuzzyDun1op

Yes we will be carrying the same morgage over to the new house and we will be increasing the amount of borrowing. That is why i thought it may be better to use it at that point as a lump sum then we don't end up paying interest on it over the term of the morgage. I think...

getmore4less

Need full details of the mortgages(most likely it will be reduce the new borrowing)

What are rates of the existing loan and new loan

What are the follow on rates if they have promotional periods.


What LTV will you have and will the deals change if you improve this with the £20k or are there fee free option that you could look at(if fees for the extended borrowing)