Premium Bonds or pay down Mortgage.

Thrugelmir

serko wrote: »

However our investments should grow at a higher rate than our mortgage interest rate.

On what basis?

eskbanker

mgarl10024 wrote: »

In a straight-up comparison between your 3.5% SVR and the 1.15% return from premium bonds however, it has to be the mortgage.
Of course, premium bonds come with the slim chance of getting much more

....and, it must be said, the near certainty of getting less! On average, a PB holder has a 98.8% chance of a sub-1% return and a 99.8% chance of not beating 1.035%.

System

They might not rely on the entire 50k to move, if they don't s&s may be an option...

DiggerUK

If you want to fantasy play like Gordon Gecko, go with the arbitrage. Just remember, it ain't big, and it ain't clever.....and six months of arbitrage ain't worth getting out of bed for.
You don't arbitrage your way out of debt, you buy your way out. I am in the school that clears debts as quick as possible, once they're gone, they're gone for good. Make a dead mortgage one of your highest financial targets.

I would recommend you put all the money somewhere safe and easily accessible until the move is done and dusted. You don't know what expenses can suddenly pop up from nowhere, that 50k will make you bomb proof. PB's can be operated on line, instant access.

When you are moving in, stash away your emergency fund, and pay down as much of the new mortgage as you can. Best of fortune going forward..._

kidmugsy

Thrugelmir wrote: »

On what basis?

Ah yes, the dreaded "should".

System

DiggerUK wrote: »

If you want to fantasy play like Gordon Gecko, go with the arbitrage. Just remember, it ain't big, and it ain't clever.....and six months of arbitrage ain't worth getting out of bed for.
You don't arbitrage your way out of debt, you buy your way out. I am in the school that clears debts as quick as possible, once they're gone, they're gone for good. Make a dead mortgage one of your highest financial targets.

I would recommend you put all the money somewhere safe and easily accessible until the move is done and dusted. You don't know what expenses can suddenly pop up from nowhere, that 50k will make you bomb proof. PB's can be operated on line, instant access.

When you are moving in, stash away your emergency fund, and pay down as much of the new mortgage as you can. Best of fortune going forward..._

If you have such an aversion to debt then you would avoid having a mortgage by not buying a house. Would that be sensible?

shepht

I tried this one - gave up on PBs, when I bought mine it took 3 months for them to go into the draw I believe. Odds went down drastically in May when they reduced prizes again. We are now mortgage free which is a fab feeling!

System

For some people who have mortgages below 1.15% or who could remortgage to be so, premium bondage could win

eskbanker

shepht wrote: »

I tried this one - gave up on PBs, when I bought mine it took 3 months for them to go into the draw I believe.

....in which case you believe wrongly! If you time your purchase well (end of the month) you wait just over a month, but if you time it badly it's closer to two months.

shepht wrote: »

Odds went down drastically in May when they reduced prizes again.

If I remember correctly, the average return dropped from 1.25% to 1.15%, and the chances of winning something were, to all intents and purposes, unaffected.

System

If you take out the unlikeliest prize, what average rate would they then give?