Should I buy a second home or pay off my mortgage early?

bigadaj

Dird wrote: »

Three! :cool: a wash, a wear & a backup in case the leaky faucet strikes

Ah well you will only have as many as you would have wives, that's for the average bloke anyway, I think it's fairly unlimited for a sheikh.

Dird

bigadaj wrote: »

Ah well you will only have as many as you would have wives, that's for the average bloke anyway, I think it's fairly unlimited for a sheikh.

Sharia allows up to 4 wives

Kynthia

You should be putting a good amount into a pension (especially if you are a higher - rate tax payer as the tax savings are so good and may be changed in the future), getting your LTV down to a level that offers the best interest rates, building an emergency fund in case something should happen, and have some long term savings for things you'll need in the future (as your pension money is locked away until at least 55 and that's a long way away for you).

Once you are doing those then you can consider more risky investments such as property. My heart sinks at the thought of being a landlord again as it was hassle and occassional stress. Plus now tge government seem to be making it less profitable with the new stamp duty and changes to how mortgage interest is an allowable expense for higher rate tax payers. It males me wonder what's next. Plus there are more and more regulations with deposit protection, EPC, smoke alarms, paperwork tgat must be given to the tenant or you are unable to evict, etc. Its certainty not a passive investment and often the return on investment isn't great and you have lots of potential costs. Most are banking on equity growth in the long term as without that they could make more money for less work and risk elsewhere.

justme111

You do not give numbers - mortgage interest , pensions, savings, wages, mortgage payments.
So no way to advise.

AnotherJoe

Andrew_Ryan_89 wrote: »

I was having this discussion with a couple of friends and they were kind of shocked, asking why don't I invest it in property instead?

You are investing in property, its called "your house". I presume you wouldn't think it prudent, if you were an investor, to invest only in say oil shares, or technology shares or retailer shares? So why would it be a good idea to invest 100% in property?

I also wouldn't take such a black and white second home / mortgage early, choice.

There's also pension, saving for a bigger house (which can be done by paying off more of your mortgage), and general savings (have you got much put by for emergencies) and investments across the wider stock markets.