50000 and dont know what to do

hib3032

first thread so bear with me i have a intrest only morgage of 43000 pounds that finishes in 6 years and have 50000 in cash do i pay it off or pay off 20000 and remorgage at a repayment over 7 years for 23000 and invest 20000 grand in say a cap protected investment for 6 years(scottish widows)i already have 10000 with scotish widows that finishes in 4years already that seems to be doing ok and this is what my bank manager has suggested to do.any thoughts? cheers

Thrugelmir

What's the rate of interest on your mortgage ?

hib3032

Interest rate is 1.49 costs 53.37 a month .thanks for repy

dimbo61

Have you got any savings in cash ISA,s ?
If not put £5100 each (other half ? ) and you should get 3%
Are there any ERC,s if you pay a lump sum off the mortgage ?

getmore4less

It is not as straight forward as it might first appear.

Savings can earn more than the mortgage so keep saving.

Paying off the mortgage is part of retirement planning so consider that as well.

If net savings are £7k is that enough you see you through the short medium term of 6 years if you paid it off, any large expences due like a new car and how long would you last if income dropped.

Also there are the can't get benifits trap with savings over £16k so although you can make a bit of money over the 6 years that may not be enough to cover the risk.

FinAdv

Hi,

Put upto £7000 in Lloyds TSB current account and they are paying 4.0% interest Gross. Plus, its in current account so you can take it out any time you want.

Cheers

dimbo61

remortgaging will cost in fees so why bother if you have the money sitting in the bank
The Bank manager is a SALESMAN and wants to sell you anything which makes him commission !
You have a great rate now but will it go up if rates rise
As G4l has said having more than £16K in savings means no benefits if you lose your job so why not clear some of the mortgage now and build up savings until you are happy then clear the rest

hib3032

There are early repayment cost 295.00 but could leave it with 500.00 pounds to avoid this,the 10000 in scottish widows was up to 12495 in october but its a maximum of 32% theres a new deal coming on the 17th of feb that a maximum of 48% with scottish widows .4% at tsb is only on up to 7000 and i would have to pay 1000 per month to get this saving accounts are at 1.50%,even thought of buying a block of gold aswell but i would probley get stitched up with lead painted gold :rotfl:. thought that changing to a repayment morgage with such a small morgage i would still have some cash ,if i pay it off then its more or less gone house is probley worth about 120000 (nothing special),im not on a great wage (hgv driver).thanks for the replys.:T

hib3032

also inflation is at 4% so savings make nothing really .

theoretica

Why would you need to change to a repayment mortgage? Aren't you permitted to make overpayments on your interest only?

hib3032

so that ive still got some money, 23000 morgage will cost about 300 ish a month if i dont 50000 - 43000 leaves only 7 grand .