Should I change my mortgage?

Kia_Chia

I have a fixed 10 yr mortgage at 4.9 % interest with about 5 yrs left.
Part of my mortgage i have to pay into a shares/ bonds and the rest is just interest. Should i change the shares/bonds part of my mortgage into a savings mortgage? And what does that mean exactly?

Thanks for any advice.

Meeper

I have no idea what you are talking about. Perhaps it's just because it's late....

Kia_Chia

thanks for that- very informative.

opinions4u

Kia_Chia wrote: »

thanks for that- very informative.

Perhaps you need to reword your post.

I'm assuming you pay interest only to the lender.

You also invest into a fund (stocks and shares ISA?) designed to repay the mortgage in future. This is already a form of savings.

What do you mean when you ask about changing to a "savings mortgage"? Do you mean change to a repayment mortgage?

It's not clear.

Kia_Chia

Sorry if its not clear. This was exactly how my mortgage was explained to me translated from another language so Im missing the terminology.

Yes I have a mortgage where I pay money into a fund, stock/shares , hopefully to make money to repay in the future and protect the difference for the bank, should there be a loss if I were to sell.
I was told that this is a good option in the long term.
Not knowing much about stocks/ shares, Im concerned that with the current climate it may be a safer option for me to switch that part of the mortgage to a 'savings' mortgage where I pay into a savings account and receive interest instead. (at rate of 4.9 %) This means higher monthly costs but at least I know what my money is doing, instead of potential loss, investing in shares/bonds. Should I switch?

Meeper

It would depend on your individual attitude to risk, at the end of the day. If you want the security of absolutely knowing that your mortgage will be paid off in the end, then it should be on repayment. If you are happy to take a risk that it might not be paid off in the hope of there being a surplus at the end, then stick with your investment element. Only you can decide how much risk you are willing to take.

somethingcorporate

Had you considered a repayment mortgage where you directly pay off the capital rather than saving / investing alongside the interest element?

Thrugelmir

At an interest rate of 4.9%. Repaying the mortgage would seem a good option, even if only in part.

Kia_Chia

Had you considered a repayment mortgage where you directly pay off the capital rather than saving / investing alongside the interest element?

I was told that someone who wanted to keep their house for a long time would benefit from this (where as I will dont as I will be returning to the UK at some point) and the monthly cost would be much higher.

Thanks for all your tips, I think saving alongside my mortgage sounds like the safer option.