save or end mortgage

paulpa66

I have a 35000 mortgage over another 9 years. I,m paying £400 a month repayment.
I have £40000 available.
Do i pay the mortgage off, or am i better saving/investing the money.
Not sure of my best option.

mleonard79

It really depends on what the interest rate on the mortgage is (if it is below the best interest rates you can get for savings accounts, once you take into account tax of course, then it may be a better idea to save but if not it may well save you more to pay it off.) It also depends on your attitude to risk whether you want to look into investing the money but I think you would need to get some independent advice in that instance.

Regards

Michelle

dunstonh

investing and using S&S ISAs can be a very good option if you match the attitude to risk. The tax free status of the ISA can be far more valuable over the long term than the amount saved on the mortgage in the short term.

With the ISA being a use it or lose it allowance, it is important to use it wherever you can.

M20DAL

Put the money in an isa £3000 per year per person you and your wife and let it build up you never know when you may need some money

jamesd

Assuming you accept the ups and downs of investing then that's the route that is likely to make you best off long term.

If your money is currently in cash ISAs it's expected that next year you will be able to shift the money into stocks and shares ISAs instead so it would be a good idea to keep the money in the cash ISAs until then.

If the money is not in ISA form then putting 7000 per year into a stocks and shares ISA in a fund supermarket like Hargreaves Lansdown using a range of funds inside it looks like a good option. For money not already in an ISA above that limit you can buy funds outside the ISA tax wrapper and shift them into it in chunks in later years.

When selecting funds, pick a mixture to roughly match the amount of volatility (up and down movement in and between years) that you'll accept. No point in putting it all into a China fund that may see a 50% drop in one year if that would make you very unhappy even if it might grow at an average of 20% a year overall. But a thousand into a China fund might work well when combined with others, like a UK equity income fund, property fund, European fund etc.