What would you do.

surfinsfree

We have been saving hard over the last 5 years and it is time to do something useful with the money . So as the title suggests what would you do.

Pay off my mortgage of £95k

Or

Invest in a buy to let.

I'm 33 and have a baby on the way and a pension scheme that looks like it will be worth very little at retirement.

A_Frayed_Knot

Buy to let.

Wish I was your age with the knowledge I have now. Know I would have more than 2 properties by now.


But you will know how you feel, and what you want more.


Good Luck

Seanymph

Being older (a lot older!) I know the curve balls life can throw. I'd want to be free and clear before THEN buying to let.

If you've got the money once then once your mortgage is paid off you can get it again.

edinburgher

Your own mortgage

surfinsfree

Reasons why you would chose one over the other would be great.
I'm thinking that the only benifits to buy to let would be that if property prices rise it will outperform savings. But having all my eggs in the property basket feels like a risk if intrest rate go up?
It also seems like any gains made paying off one mortgage are offset by the cost of the intrest on the other.
But if house prices keep rising I may never have the opportunity again, and be priced out of the market???????

Stevie_Palimo

surfinsfree wrote: »

Reasons why you would chose one over the other would be great.
I'm thinking that the only benifits to buy to let would be that if property prices rise it will outperform savings. But having all my eggs in the property basket feels like a risk if intrest rate go up?
It also seems like any gains made paying off one mortgage are offset by the cost of the intrest on the other.
But if house prices keep rising I may never have the opportunity again, and be priced out of the market???????

The above can work both ways here with either your potential buy to let or the home you reside in, For me it would be the home you reside in being paid off, That is security in it's self and then you have a chance to save again but if something major happens where you lose additional income at least you have your home owned outright.

A_Frayed_Knot

On reading the question again, same difference,

do both, pay off your mortgage, and get another mortgage for a buy to let, or


buy a buy to let "cash" and keep your mortgage.


same difference - do both.

kathrynha

I would pay off the mortgage. Once mortgage free I would put the amount you were paying in mortgage payments and the amount you were saving all in to savings, and it will soon build up. I would then loo at investing that money, possibly spreading it between a few investments types so that it's not all eggs in one basket.

dano17439

Pay off mortgage. You never know whats round the corner, and if worse comes to worse, at least you'll always have somewhere to live, especially as you have a little'un on the way

diamondsonly

Hi there, we have been thinking something similar recently. Having been given £50k for our children by grandparents for a buy to let and another £20k we have in savings. Our mortgage is Currently £139500 so we could use the money to pay off half the mortgage or we could do the buy to let. We have decided to speak with an independent financial adviser to help us decide whether to invest the money, pay off the mortgage or potentially invest in a buy to let (although we have gone off the idea as it feels like putting our eggs all in the property basket).

My idea would be to pay off half the mortgage and use the rest of the money to invest in various things, stocks and shares, wine, bonds etc. Just to diversify xx

Good luck with your decision. Maybe worth getting independent financial adviser opinion?

edinburgher

I said 'your own mortgage' because it gives you an unassailable platform to build on. If you own your own home, the government is unlikely to let you starve, so no matter how bad things could get, you will always have a roof over your head.

This would leave you free to invest a large proportion of future earnings, it's a wonderful situation to be in :beer:

I would avoid B2L if it is going to be your only investment, or a high proportion of your net worth. You are already plenty exposed to the housing market through your primary residence. You would be far better diversifying through ISAs, pensions, P2P lending, reducing your dependency through insulating your house/renewable energy generation etc. etc.

My idea would be to pay off half the mortgage and use the rest of the money to invest in various things, stocks and shares, wine, bonds etc.

Investing in wine is highly specialised and not one for the faint hearted (some of the more popular bottles can run to ££££, not something that you can afford to mess up). I really think it's better left to high net worth individuals who are either suitably well versed to make decisions on what's 'hot', or who are willing to pay for advice.

I'd leave it unless you have exhausted all other less exotic options.