overpay on mortgage instead of saving?

EdGasket

MatthewAinsworth wrote: »

I would recommend s&s isa funds, good growth, some risk, good liquidity

And lots of risk e.g. housebuilders, property, banks all down 40% or more at the moment.

Pay of your mortgage first; that's what I did and never regretted it for a moment. You are unlikely to get a guaranteed return on investments that exceeds your mortgage interest!

System

S&s certainly won't be guaranteed but my mortgage is 2.39% so even cash can beat it (and that's safer liquidity)

When I was trying to upsize from my old 1 bed flat I was overpaying the mortgage, but it was still a real struggle against house price inflation, the gap between my old flat and my new house was growing quickly and eating heavily into my savings.

If you don't speculate, you lose out to house price inflation anyway when you try to upsize. That's not entirely safe either.

Mortgage is good if you anticipate an interest rate rise. S&s is as are only for the longer term and taking a long term view reduces risk

atush

EdGasket wrote: »

And lots of risk e.g. housebuilders, property, banks all down 40% or more at the moment.

Pay of your mortgage first; that's what I did and never regretted it for a moment. You are unlikely to get a guaranteed return on investments that exceeds your mortgage interest!

While you are unlikely to get a 'guaranteed return' bigger than your mtg, you are likely to get returns in excess of your mtg rate over the long term. I certainly have done better in the last 10 years than that PA.

System

Nothing in life is certain, I think I'm more likely to die in a car accident than my s&s isa under performs my mortgage over my lifetime.

Historically, through all the crashes of the last century, the average return was about 7% I read

EdGasket

atush wrote: »

While you are unlikely to get a 'guaranteed return' bigger than your mtg, you are likely to get returns in excess of your mtg rate over the long term. I certainly have done better in the last 10 years than that PA.

Well I haven't!

atush

More's the pity.

perhaps you should review your investment strategy?

Dird

atush wrote: »

More's the pity.
perhaps you should review your investment strategy?

How have yours performed over the last 10 years? The world trackers I'm looking at only started 3-5 years ago but the US had 10% annualised and UK 4.6%. Find it pretty amazing US averaged 10% over the last 10 years despite the crash :-o

EdGasket

atush wrote: »

More's the pity.

perhaps you should review your investment strategy?

Yes indeed. I have been in the wrong investments and the right investments but at the wrong time. What I am saying is that there are no guarantees to make anything in shares; I am still showing a loss after 10 years! FTSE is still lower now than it was 16 years ago; it is a very difficult market to make money in. imho pay off your mortgage.

bigadaj

EdGasket wrote: »

Yes indeed. I have been in the wrong investments and the right investments but at the wrong time. What I am saying is that there are no guarantees to make anything in shares; I am still showing a loss after 10 years! FTSE is still lower now than it was 16 years ago; it is a very difficult market to make money in. imho pay off your mortgage.

That would be unusual though.

The ftse 100 is one of the worst performing major indices in the world, so you need to be diversified. Also you need to look at total return, with dividends reinvested, in which case even if you put a lump sum in at the high point in 1999, you'd still have more in your fund due to compound growth.

atush

EdGasket wrote: »

Yes indeed. I have been in the wrong investments and the right investments but at the wrong time. What I am saying is that there are no guarantees to make anything in shares; I am still showing a loss after 10 years! FTSE is still lower now than it was 16 years ago; it is a very difficult market to make money in. imho pay off your mortgage.

You are forgetting other risks incl shortfall and inflation risk.

And the FTSE, with dividends incl and reinvested, is well up over 10 years.

We cant help that you invested above your risk profile and didnt diversify.