Thoughts please

a1i.c

I am extremely lucky that I'm getting an inheritance in 3 weeks.

It will be approx £60,000. What should I do with the money? I'm at the end of yr 1 of a 3 yr fixed mortgage at 4.49% but can put in £33,000 this year. and then after the anniversary put in a further £30,000. This will lower the LTV so I'm looking at remortgaging in 2 years to get a much better rate (if they haven't shot up by then).

I may have the opportunity to lend this out privately, where the % varies between 6.5% and 10% for 2 years.

I'm also looking at bank savings (to 2 years) savings their % is up to 1%.

I am tempted to put it all into the mortgage, so that I'm not tempted to spend it poorly, but I'm not sure if that's wise.

If you had the opportunity with £60,000 what would you do?
1 - put into the mortgage
2 - try to get it invested for 2 years
3 - put it into a bank for 2 years

xylophone

You have an emergency fund?

If so, in your position and on that mortgage rate, I would be inclined to pay the £33000 into the mortgage, £15000 into a stocks and shares ISA, ( maybe Equity Income fund/ Distribution Fund) and the balance into high interest current accounts - £2000 into TSB Classic plus, £2500 into a Nationwide Flex direct, £4000 into Club Lloyds, £3000 into one Tesco current Account and £500 into another.

The Lloyds requires two DDs which can be easily managed by opening a Tesco Internet saver and a Tesco Instant Access Saver and pulling money from the Lloyds account.

Cycle the required monthly inputs round the accounts by Faster Payment and move the monthly interest to Tesco Current Account 2.

Consider your position after a year - move the Nationwide account as interest rate drops.

http://monevator.com/compare-uk-cheapest-online-brokers/ For S&S ISA.

a1i.c

xylophone wrote: »

You have an emergency fund?

No I don't. Why would I need one?

badger09

a1i.c wrote: »

No I don't. Why would I need one?

In case you are faced with a large unexpected bill, lose your job etc

ColdIron

a1i.c wrote: »

No I don't. Why would I need one?

In case of an emergency?

xylophone

No I don't. Why would I need one?

It is wise to set aside a sum in an easy access account to meet any unexpected expenses/ tide you over if you lost your job etc?

You could argue that your inheritance has become your fund, but I had thought that you wanted to ring fence this for mortgage repayments/ house improvements/future projects etc?

kidmugsy

Put 6 months of outgoings into an emergency fund using accounts such as those suggested by xylophone. Consider bunging the rest into your mortgage - a tax-free, virtually risk-free return of 4.49% p.a. is hard to come by in this low-interest age.

When the mortgage matures consider again how best to use the capital potentially available to you. That will give you two years in which to read up on investments. And wait for a market crash!!!