What did you do?

aphill24

Hi All. We are going to be mortgage free on the 15 February 2015 and I was wondering what other posters did with their money when they also became mortgage free. I am 50 yrs old tomorrow and can't believe how times have flown. It has been a struggle particularly in the beginning when interest rates were high but i am so glad we kept the term to 25 yrs when we moved house in 1998. This meant our payments were higher as we borrowed more money but we didn't want to be paying a mortgage for longer than the original loan. We don't have any spare cash as it has been used on paying down our loan whilst we also had a new kitchen last year that cost a bomb. My point is what could I do with having spare cash? Is this an opportunity to buy another house, rent it out and hope that it appreciates in value in the next 15 years. This would then supplement my work pension for a healthy retirement pot if all goes to plan. ( I know houses can lose money as we lost £5k on our first home bought in 1990)
We need to save money for a rainy day and plan to do this in an isa account. Our other debts are £500 on a credit card that will be first to be paid and qwe have £2500 on an interest free credit card that was used for our kitchen. This has 24 months left before accruing interest and I am paying it off £100 p/m so no need to pay it earlier really. The final debt to mention is a car loan with the bank for £231 P/M that has 22 months to run. I am not hung up on paying it off early as it is 5% personal loan and not sure about the penalties for early payment.but will always be happy to have a car loan as it is affordable. My salary can range from £40 to £50k pa depending on overtime so I really want to make this work in the next 10/15 yrs rather than fritter it away. Any suggestions?

edinburgher

• Pay off all debts where you're paying interest
• Save an appropriate emergency fund in a higher rate current account (for example, TSB or S@ntander)
• Cram money into your pension, you appear to be a higher rate tax payer and will get 40% added on top by HMG! You'll be able to draw this money down in 5-8 years depending on your circumstances

Why bother with the stresses of BTL?

aphill24

Thanks for the reply, Common sense really and it's what I will do. My pension is a final salary and some work mates are paying money into AVC contributions which I will look into.

edinburgher

Do remember that AVCs through your employer won't always be the way to go, costs might be lower (and with the same tax benefits) if you set up a SIPP. That said, if you're paid through salary sacrifice, there is probably a lot to be set for AVCs.