Solar or overpay Mortgage

BogEd

I've £10,000 to spare. Better to reduce mortgage or install solar?

Smiley_Dan

Depends on too many things to answer. What's your mortgage rate, size, LTV, income tax rate, term, location, roof orientation, roof pitch, roof space, your attitude to risk, favourite colour...

matelodave

overpayment

I'd guess that mortgage rates are going to start rising in the not too distant future so anything that reduces the capital, the term and the interest you pay must be a good thing - you might pay it off quicker and therefore possibly retire a bit earlier.
The best thing I ever did was to write a cheques to the building society to finish my mortgage when I got made redundant - I had been overpaying anyway and managed to finish it 7 years earlier than forecast and so managed to retire early

Screwing £10k to the roof and waiting 8-10 years to get your money back doesn't seem like ever such a good idea to me unless you are reasonably confident that you won't need some of the £10k during that time and a) you are going to be living in the place for at least 10-12 years and b) you'll live long enough to reap the benefit if you do.

[Deleted User]

overpayment

Overpay mort any day of the week. Just use all the other common sense methods to reduce energy consumption. Although I have solar and am very happy with I'm on the old vastly higher rate that is paid for longer. Would not consider solar now on the lower rate...

lstar337

jeepjunkie wrote: »

Would not consider solar now on the lower rate...

Why not?

The outlay is much lower now, so the numbers still add up.

[Deleted User]

overpayment

lstar337 wrote: »

Why not?

The outlay is much lower now, so the numbers still add up.

£3.5kish diff for similar spec/quality, way less than half the return over 20yrs instead of 25yrs.


I thought it marginal then given the risk. Funded with 0% EST loan and cheap mortgage loan [not using my own cash - it has to pay for itself - like stoozing gone mad] - now all paid back but still wonder if it was the best use of funds... Still the £1700+ quid a year + leccy savings + hot water is nice if you plan to stay put


It's not all plain sailing though, need to sort the occasional tile and replaced one smashed panel after a storm...


Perhaps still great for those down south for max generation. Happy to be proved [not the right word really] wrong.


Anyway, from experience, whenever I get a lump sum of cash it goes in the mortage which makes such a huge difference over the longer term, As long as you maintain the same level of payments.


Cheers

BogEd

Thanks v much for replies so far. I feel myself edging toward overpayment on the mortgage. Knowing my luck though, with it all going t***s up in the Middle East, I'll end up regretting not being more self-sufficient.

moxter

Solar

The point about how long you'll live there is important. Spend £10k on panels today and sell tomorrow and the value of your house almost certainly won't go up by anything near £10k (well in this housing market it might, but it won't have much to do with the panels!)

Definitely do a proper evaluation of how much you are likely to gain from the panels depending on roof area and orientation etc - the differences can be quite large.

One other point worth considering - albeit unimportant from a purely financial point of view - is how bothered you are about helping reduce fossil fuel usage.

Interesting decision to have to make though.

Smiley_Dan

It should also be mentioned that a standard 4kWp installation is more like 6-7k, not 10.

BogEd

System is in fact 7k for 3.25 kWp. 20 yr FiT income of 7.K. 9.2 % return. I guess I could pay 3k off the mortgage now and then use energy savings/FiT payments to increase monthly payments.

KierBrook

overpayment

Overpayment for me. Think about it...the sun could stop shining any day of the week and the world could end but you can guarantee that the banks will still be wanting your money