What would you do?

paultither

My wife and I currently have a mortgage of £120,000. Our house is worth around the £250,000 mark.

We pay £680 a month in mortgage but have stocks and shares to the value of £180,000.

I have been contemplating this as my wife has recently set up a new business and she is struggling to contribute to the mortgage so money is a bit tighter than I would like.

Our flat rate mortgage is due to end its honeymoon period mid next year and I have wondered whether we should use £120,000 of our shares to completly pay off the mortgage. This is made even more tempting what with rising interests rates and the whole bank uncertenty thing (Northern Rock).

What would you do if you were in the same situation, struggle on paying the mortgage and ride the storm until the business picks up and keep the money invested in stocks and shares, or pay off the mortgage and leave £60,000 invested?

Broken_hearted

I'd pay the mortgage off

chevalier

I would pay the mortgage off for several reasons.
1) You don't know how the market will perform in the next year. What if it all goes down, and your shares are only worth half what they are now. How bad would that be?
2) You are paying interest on the mortgage. Is the dividend on the shares more than the interest you will pay for the next year? Probably
3) What a weight off your mind to know that no matter what you house is safe, as there will be no mortgage on it.
4) You have the money you would be paying on the mortgage to support your oh business through the first year, which is when many businesses fail
chev

Snaggles

There's usually a few interesting discussions on the mortgage free wannabe board on this subject - you might get more replies on there, but my gut feeling is pay it off. But then i don't really like to take risks very much!