any help appreciated

eddiewilf

We have a £127,000.00 2 year fixed rate mortgage deal at 4.99%. We can pay off 10% of the mortgage without being penalised each year.
We have come into some money of £50,000.00.
We are unsure whether to pay the 10% off this year or invest the £50,000.00. Thanks for your time

getmore4less

If you think you can invest at a rate better than the mortgage go for it.

Why not pay the 10% and invest the rest.

eddiewilf

Good point thank you that did cross my mind but wanted a second opinion. I'm going to have a look now and see what rates are like for a bond for the remainder

dimbo61

You dont give when your 2 year deal started but if you can pay 10% of the outstanding balance this year and 10% next year that will I feel be better than putting it in investments
Dont forget cash ISA,s as long term savings ( emergency funds) and then look at regular savers so you have the money available at the end of your fix !!! so you can IF need be pay a lump sum off to get the best rate on your next deal/remortgage.

eddiewilf

Our 2 year deal started September last year and we have just received the £50,000.00 now. I've been looking at santander ISA's now and they seem to be the best rate. We don't currently have any ISA's. My other half wants to pay 10% off this year and then 10% off next year. Then see what's about when the fixed deal is up

delmar39

If you're going to save rather than pay off the mortgage then you need to get a better savings rate than your mortgage rate (above 4.99%).

Otherwise, target your mortgage.

I'm one of those people who likes to have savings in the bank, whilst at the same time making overpayments to my mortgage.

Index Trackers are good, however, they're high at the moment so a lump sum investment wouldn't be advised. Better to drip feed money in over time to ride out the peaks and troughs in the stock market.

In summary then, I would put some towards the mortgage, put some in savings and blow some of it on having a good time!