Gift received. What should we do?

Anonymous3

jsaver wrote: »

Some lenders will let you vary the term down from your 29 years, so your monthly payments could be increased a lot out of your windfall, without incurring penalties....

Thanks for this, yes this is indeed possible with Nationwide. I've gone ahead for the short term buy overpaying mortgage at the max each month until we have determined the right route for the cash.

getmore4less wrote: »

As the house is a keeper for 10 years I would start thinking about long term investment and retirement.

The rate is good so depending on the penalties it is probably best to overpay to the max and save the rest for now plenty of time to think about things.

Do the numbers

You could investigate a shorter term to up normal payments.

If there is the remotest chance you will want/need to upsize in the future keep saving(paying a virtual mortgage).

Yes, completely agree. As you will see above, have gone down the overpayment route. It will certainly allow us a more 'relaxed' life in terms of being able to go on holiday etc now.

The vast majority of the money £100k+ will be locked away in high interest savings for 3 years I think, and will then be available when our mortgage ends for us to pay off a large part of it etc.

As above, I'm under 30 so currently retirement is nowhere on my radar, but paying off the mortgage is the main focus for the short term. From there we can look at retirement plans etc.

FWIW, I've just got a new job taking my monthly income to £2k rising annually by a £k so that will allow for further savings etc.

Anonymous3

PeacefulWaters wrote: »

Overpay the maximum allowed penalty free each year. Put the balance into the highest easy access / short term fixed rate savings / current accounts.

Reduce the term, assuming this can be done for free, and pay higher mortgage payments. Care to ensure any payment after the money runs out is affordable.

When the debt is zero recycle the monthly payments into pension planning and other longer term investments.

Good luck.

Thanks PW, yes, this is the route I've gone down and as per above, will place a large amount on high interest savings and use the rest of it to pay/overpay our mortgage,