Best Investments?

Scarla

£90,000.

May as well give up now.

Linton

Scarla wrote: »

£90,000.

May as well give up now.

Sorry, to get £90K in 15 years paying in £2400/year needs a return of about 12% annually. Such a return is extremely unlikely. You really do need to think though other options. Were it to be 20 years you would need a return of about 6% - a much more realistic figure.

Can you remortgage at a lower interest rate?

Scarla

Doubt I could remortgage as am now single and not receiving a great salary, but thank you for the suggestion.

I may ask if I could extend the term, they can only say no?

masonic

Scarla wrote: »

May as well give up now.

I don't think the situation is quite that dire. The main thing you have in your favour is that the debt won't be increasing over the next 15 years, but your disposable income probably will. Assuming your pay increases faster than your living costs, then you will have more money to either put towards repayments or investments, depending on which route you choose.

Paying down the capital either through overpayments or later through switching to repayment will result in more of your payments going towards capital and less towards interest and also give you some protection against future interest rate rises.

Investing might result in a better end result, but you will end up paying more mortgage interest and it would be unwise to still be in high risk investments towards the end of your mortgage term, so you'd have less time to generate the best returns available and would have to settle for lower growth in later years if you wish to preserve your capital.

Scarla

Ideally I would like a solution that would give me peace of mind.

I had thought about taking out a new pension policy and making £200 per month payments, though after reading about them I understand there would still be risk and 25% tax to pay if I took one lump sum.

Perdu

Scarla wrote: »

Doubt I could remortgage as am now single and not receiving a great salary, but thank you for the suggestion.

I may ask if I could extend the term, they can only say no?

You say it's a house and you are single, could you perhaps rent out a room (or two?) A tax free £ 300+ per month added to your £ 200 should make £ 90k in fifteen years easily achievable.

Mistermeaner

Sell the house?

Would you buy a house today that you know you can't afford? Assuming the answer is no why keep one now?

That's the peace of mind solution.

If your plan is to use your pension to pay off your mortgage what are you going to live on?

Take note kids

Scarla

I can't sell the house as it's jointly owned and my ex will not agree to the sale, I have already broached the subject. Initally he said he would pay the mortgage payments, he now says he won't and will only pay a small sum for the children.

We could afford the mortgage when we took it out, it was on repayment terms then I had a nervous breakdown and couldn't work so changed it over to interest only for the short term and never changed it back.

I have already admitted to my stupidity, hindsight is a wonderful thing.


I can't share a room with either of my children as mixed sex and neither room would allow for 2 sleeping, so can't rent take a lodger.

powerwin

Just a comment on investments. You do need to be very careful re risk. However, since you asked, if it was me, as I have done a lot of homework on the subject, I would use the savings to buy shares in Blue Chip UK companies that pay out a high dividend, e.g. 4%+, so companies like National Grid, and Standard Life. Very stable companies that have consistently paid a high dividend for years.

That's the kind of investment I would be looking at. There may be a more tax efficient structure to make the investment considering you are saving to pay off a mortgage.

Before any investment, do lots of homework.

Rgds

masonic

Scarla wrote: »

I can't sell the house as it's jointly owned and my ex will not agree to the sale, I have already broached the subject.

Well from what you've written it seems he is being completely unreasonable. He wouldn't have the opportunity to agree to the sale if you found somewhere cheaper to rent, stopped paying the mortgage, and the bank repossessed. Not only that, but it would ruin his credit file. So, you should ask him which he'd prefer.