To pay off or not?

thehound

I'm a bit confused! After an inheritance I could pay off a lot of the mortgage. I thought I'd ask an IFA's advice and they said you should keep your mortgage as it's the cheapest loan you can get, and invest the capital in shares etc.
the msn way is to get debt free. The ifa seems the opposite. They aren't Independent are they... They've still got to sell something to make a living. Which leads to my naive confusion.
I guess you'd all say pay it off on this forum. Is that really the best option?
I have a flexible mortgage and the inheritance is currently offset against the mortgage so the interest is practically nothing.
Thanks for any input!:)

dktreesea

There's something to be said for paying off the mortgage - peace of mind! At least you won't have to worry about how to cover your mortgage if, for example, you lost your job. If you like where you are living and plan to live there long term, why not own the property outright?

quicklee99

I don't think there is an easy answer, it depends on what your goals/outlook. Clearly your IFA will have their own objective to sell you a product but that doesn't mean investing is a bad idea.

If you want financial security then paying off your mortgage is great. From then onwards you will have lower monthly out goings. If you hate your job then it gives you a bit more flexible to do less hours/something else you enjoy but might pay less.

Or you could put your money towards investing and/or a pension. It is possible to give you more money later on in life. Over a long period of time it could be the case that you will make more money than you could have ever saved by paying off your mortgage early.

Then again you might get run over by a bus tomorrow.

I'd say figure out what is important to YOU, think about what you want to achieve short/long term. Of course the above examples aren't mutually exclusive you could split your disposable income between paying off the mortgage/investing/pension/savings.

People on this forum will be more geared towards paying off their mortgage early. Long term it might not be THE most financially rewarding, but that doesn't mean it's a bad choice. It's the choice that's the best compromise to achieve their own objectives.

Best of luck

Watty1

I think it is entirely up to you and your outlook on life. And age too. If I knew what I know now - say 20 years ago, I'd have kept the house I lived in rather than climbing the property ladder and invested money instead.

I'm paying down my mortgage so I have options in my work life. I might carry on with my current job. I might not. But not having my mortgage will give me choices.

If it were me I would pay off the mortgage - why pay interest when you don't have too????? Then save the amount I would have paid in mortgage each month as an investment plan. After all you can always remortgage.

But thats me.....

Mr Watty would quit work and use the money to start a property rennovation business. But thats Mr Watty.....

we are all different

bugslet

I am in a similar position to you in so far as I came into enough money to just about pay off my mortgage, which is only 40k.

Really it's up to you, but FWIW, I have chosen to put some aside for home improvements, tie some up long term and have half in savings that I could get to it relatively quickly. I was overpaying slightly before the inheritance, I have since increased the amount by which I overpay. I currently have a very good deal on the mortgage.

That won't suit everyone, but I am happy with the decision

SG27

The ifa is right. Depending on your rate you could very probably earn a higher return by investing/saving. But that is making several assumptions. Like interest rates staying low and investment returns.

Personally I would pay off the mortgage though.