saving £100,000 ten years to utopia !!

ourcornercottage

I like a mix of the 2.

I OP each month as much as I can £100-£400 depending on finances but I put money into savings, pension and unit trust every month too.

I recently used savings to invest in solar panels and also just started P2P last year in a small way and inspired by eds ideas recently opened a S&S ISA.

I'm aiming to keep up the OP's at £400 per month so I can see the mortgage reducing but increase my savings/investments when I can afford extra. I think I personally need to see the mortgage reducing to help with my motivation on all fronts.

Firegirl

I do a bit of both because my mortgage rate is very low. I have a stocks and shares ISA and I have an offset mortgage. Life can change in a blink of an eye and you need to do what makes you comfortable and happy.

From what you've said I would say you should check if a no risk account can pay more interest than you would pay on your mortgage.

Tilly_MFW_in_6_YRS

Morning, I too have read about not OPing etc but for us, the size of the millstone round our neck was too stressful.

Maybe the size of mortgage has something to do with it?

Each persons journey/psyche is different - you seem to have a solid plan both in terms of clearing the mortgage and preparing for the future.

Good luck, Tilly

gallygirl

streethack wrote: »

Perhaps my view is a little tainted but paying off your mortgage seems like the best decision you can make. Screw 6% returns if they exist I'm choosing freedom and God willing my own children will always have a roof over there heads.

As Ed has said you can get better (in some cases much better) returns but it's all about security as your biggest driver so I think you're doing the right thing, especially with a relatively high mortgage rate - you can't beat it for any meaningful amounts of money. As security is so important then concentrate on that, once you've nailed it then you can look elsewhere.

I'd caveat that by saying if you go onto a low SVR once your fixed rate ends then time to look again, especially regular savers - FD 6%, M&S & TSB 5%. Safe and would beat a low mortgage rate. After tax, assuming you're a standard rate payer, the FD would beat it now but the benefits would be minimal.

The important thing is you're thinking, prioritising and doing :j.

streethack

Some great replys hear. Currently I drip feed into two FD regular savers for the maxium on the advice of people here. This will eventually lump off the mortgage at the end of ten years, holding this back gives me a bit of a security blanket so to speak. Never heard of P2P lending perhaps this is better than the Regular savers although I currently only have £10,549 ear marked for the mortgage.

I have some other emergency savings for car breakdowns, unexpected costs ect. Im fortunate enough to have one of the old type of pensions which I max out.

Not sure what this will all look like next year a month ago I found a five year fixed for 2.19%. This would be good I dont think I would put the difference on the mortgage as an overpayment, this would be £1,300 I can put toward are family holiday each year which I struggle to find. So im not totally mortgage crazy just a little

Silian

I too started my journey working towards mortgage freedom but then asked the "overpay mortgage or invest" question. I personally decided to invest instead and while I do overpay my mortgage each month, it is by a small token amount.

The reasons why I did this was:
Security: While it is great to own your own home your overpayments are not going to help you pay the other bills should you lose your job. Until you have completely paid off your mortgage they won't assist you in not losing your house either - it doesn't matter how much you overpaid, if you can't make the monthly payments you stand a chance of losing your house.
Edit: I feel pretty secure in my job, but I am looking to retire early. When I retire my mortgage overpayments won't pay my other bills.

Returns: If you invest sensibly (in funds instead of individual shares/bonds) you should easily be able to beat mortgage interest in the long run.

But the most important thing is that you spend less than you earn - if you do that you are ahead of the game already.

streethack

Great points Sillian these were my original thoughts when I started this dairy, thats why its titled "saving 100,000 ten years to utopia" however somthing changed, interest rates I was getting. Back then I had two years ISAs at 4.1%. My service has increased at my work place so if im made redundant, which is always a possiblity in my sector I should have a large chunk to work with. Also im in a high tax bracket so and know nothing about investing so this swayed my decsion to overpay on the mortgage.

I have been busy opening a 123 account and changing all my direct debits as I have money sitting in different places earning nothing. Ive transfered 12,500 into this account and will drip feed my two FD regular savers from this.

BIG overpayment this month as its my bonus month at work a whole £1,500 smackers whacked off the mortgage this month whoo hoo! This brings the outstanding mortgage to £112,868

aznlayer

... also I thought it was good to OP while interest rates are low. It means that when they go up, you are hit a little less (as the capital has reduced). My grandmother was telling me of times when mortgage rates were near 10% - clearly no risk of that anytime soon but it makes a point.

streethack

Shares on the way back up now currently share holdings are £18,420

streethack

Shares going potty at the minute currently up to £21,145 with talks of a merger. Heres hoping for a windfall to crack a chunk off the mortgage