Did I give good advice?

Thefunkygibbons

I guess when I look at it as being risk free, I am separating the debt from the asset

and paying off a debt is risk free as there is certainty as to the amount owed

However, the risk applies to the asset, in this case a house, which can go up and down in value.

But once one has decided to buy with a mortgage rather than renting, or living with parents, you end up with a debt that is known, and an asset that has some attributes of an investment, the price of which can vary

I guess my question always is, why does one need to maintain the mortage in order to have access to money. The risk is always that one is tempted to spend it

Personally, I am happier to have a rainy day fund, and then save interest by clearing the mortgage

Now that it is gone, I am building my savings, using ISAs and some carefully picked stock market investments

skintchick

Thefunkygibbons wrote:

I guess when I look at it as being risk free, I am separating the debt from the asset

and paying off a debt is risk free as there is certainty as to the amount owed

However, the risk applies to the asset, in this case a house, which can go up and down in value.

But once one has decided to buy with a mortgage rather than renting, or living with parents, you end up with a debt that is known, and an asset that has some attributes of an investment, the price of which can vary

I guess my question always is, why does one need to maintain the mortage in order to have access to money. The risk is always that one is tempted to spend it
Personally, I am happier to have a rainy day fund, and then save interest by clearing the mortgage

Now that it is gone, I am building my savings, using ISAs and some carefully picked stock market investments

You see, she WOULD spend it ! She does spend lots of money all the time, and it makes me weep. So I think what i advised is the right thing (and of course she will speak to her FA about it!)

Thank you, Funky - haven;t seen ya for aaaaages. Nice to see you';re OK

Tim_L

That's a different situation really - if the money would end up being spent on frippery it may as well be put into reducing the mortgage. Definitely the right advice in that context.

Thefunkygibbons

I am generally careful with money, but I liked the pressure of (over)paying the mortgage first and then living on the rest

That is why I always bumped the overpayment after each payrise so that I did not get used to to the extra money

For a lot of people, I think that that just works

Joe_Bloggs

I have tooks Tim_L's advice and invested £1000 in a mini cash ISA.
J_B.