What to do with £300 p/m

Hyp3rion

Thanks for all of the replies.

I do not have a non-working spouse, everyone in my household works and has a pension.

It looks as though mortgage overpayments comes out on tops. Would just like peace of mind that this is the best option and the money could not be better used elsewhere with a better return than 3.99%.

martinthebandit

You might get a better return but being mortgage free is a very nice situation to be in.

IMHO the earlier you can get there the better.

torbrex

Its a no-brainer as far as I am concerned.
I became mortgage free some years ago by firing all my spare cash at the mortgage and the feeling of relief and security far outways any piddling 1% extra that you might make by moving your money around various investments.

Eponym

It's entirely possible (probably likely) that you could get better than a 3.99% return by investing it wisely. But, that would require you to learn about investments and of course there is no guarantee that it would work out better than paying off the mortgage.

You have to decide the value to you of possibility of better returns vs the certainty of reducing your mortgage.

andy.m_2

I am in a very similar situation to you, recently having become debt free I find I have disposable income.

Investment v mortgage is a tricky one to call, certainly you can get better than 3.99% on the markets if you are good, wise, quick to act or lucky, however you are getting a guaranteed fixed rate savings return of 3.99% with next to zero risk by paying down the house loan.
If you think you can do better and are not averse to the possibility of messing up then you should go fot it. on a £100,000 lump sum then a piffling 1% as described above is quite a bit.
The feeling you get for paying off the same amount lump sum of mortgage from investment and still having £1000 in your pocket will be sweeter no doubt.


me? I'm going to pay down the house

justme111

What eponym said.
We do not know your life , may be the best use for money would be putting it towards second education or opening family business or paying for a sport hobby which would increase your life expectancy. That's too broad a question.

Thrugelmir

Hyp3rion wrote: »

Would just like peace of mind that this is the best option and the money could not be better used elsewhere with a better return than 3.99%.

This is a guaranteed return. Better to clear debt first. Then risk what you can afford to lose afterwards.

latecomer

Hyp3rion wrote: »

I'm 43, have a final salary pension which I cannot pay AVC's to.
I have a mortgage with 18 years to run which is 145,000 @ 3.99%

Any thoughts are appreciated.

Hyp

I know its not really what you were asking but if you have no plans to move, have you considered a new mortgage? You can get 5 year fixed rates below 3% which would make a difference to your monthly cost - which you could then use to overpay?

atush

far outways any piddling 1% extra that you might make by moving your money around various investments.

Very true in that situation, but some of my investment trusts are up 16-30% this year. But I still overpay (my much lower tracker rate mtg) alongside.

There is no reason you have to do just One thing with your extra cash. Unless you want to.

Thrugelmir

atush wrote: »

Very true in that situation, but some of my investment trusts are up 16-30% this year.

Money is chasing yield with no thought to underlying investment (i.e. coroporate profitability). Currently the only game in town. My bets on a correction in 2014. As profits are cashed in.