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Conundrum
Running_on_empty_2
Posts: 11 Forumite
Hi forum posters,
We have a bit of a savings/mortgage related conundrum which we can’t quite work out.
We have £35k chunk of mortgage (added from a house move) which we can pay off from £40k of Premium Bond savings we have worked up.
We pay base rate +0.99% on the mortgage with 18 years to go. We also have life insurance on it (so an argument that should the worst happen we are covered anyway).
So, our conundrum is should we keep saving and paying the mortgage back on the £35k chunk, or would we be better paying off the £35k chunk - but then losing our nest egg of savings....? Indeed, are there any suggestions people might have that we haven’t considered?!
All advice appreciated - thanks in advance. :-)
We have a bit of a savings/mortgage related conundrum which we can’t quite work out.
We have £35k chunk of mortgage (added from a house move) which we can pay off from £40k of Premium Bond savings we have worked up.
We pay base rate +0.99% on the mortgage with 18 years to go. We also have life insurance on it (so an argument that should the worst happen we are covered anyway).
So, our conundrum is should we keep saving and paying the mortgage back on the £35k chunk, or would we be better paying off the £35k chunk - but then losing our nest egg of savings....? Indeed, are there any suggestions people might have that we haven’t considered?!
All advice appreciated - thanks in advance. :-)
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Comments
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Hi,
I'd use your Premium Bond savings to pay off the £35K. I would then start saving up again. To be mortgage free would be wonderful!Interest rate 1.25%, offset mortgage Woolwich0 -
Bump:money:0
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Take this advice. As Arnie would say, "Do it nooooooooow"Miss_Moneysaver wrote: »Hi,
I'd use your Premium Bond savings to pay off the £35K. I would then start saving up again. To be mortgage free would be wonderful!Mortgage free I: 8th December 2009!
Mortgage free II: New Year's Eve 2013!
Mortgage free III: Est. Dec 2021...0 -
Why dont you go half & half?
Best of both worlds then.I am a Forum Ambassador and I support the Forum Team on Mortgage Free Wannabe & Local Money Saving Scotland & Disability Money Matters. If you need any help on those boards, do let me know.Please note that Ambassadors are not moderators. Any post you spot in breach of the Forum Rules should be reported via the report button , or by emailing forumteam@moneysavingexpert.com. All views are my own & not the official line of Money Saving Expert.
Lou~ Debt free Wanabe No 55 DF 03/14.**Credit card debt free 30/06/10~** MFW. Finally mortgage free O2/ 2021****
"A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
***Fall down seven times,stand up eight*** ~~Japanese proverb. ***Keep plodding*** Out of debt, out of danger. ***Be the difference.***
One debt remaining. Home improvement loan.0 -
What a wonderful situation to be in! As long as you don't squander it I think you're fine.
As you're asking on the MFW thread you'll mostly get told to pay it off.
I would consider your overall financial savings and goals e.g. Do you want to be financially independent by a certain age? Or want to buy a bigger house / reduce working hours etc. What other savings do you have?
If I had £35K right now I would have £5-10K in bank accounts that pay up to 5%, have a bit of premium bonds (cos I'm convinced I'll win a million); start investing regularly in a low cost S&S index fund, and pay off a bit of the mortgage.Mortgage [STRIKE]16/03/2011: £190K 01/01/2017: £107,729.65 [/STRIKE] 01/07/2017: £95,979.89
OPs 2011-2016 = £45K 2017 OPs = £9250.200 -
Thanks museumworker,
You are spot on there, we’d have £180k left over (18 years to go) if we paid that lump off. We have £10k left in premium bonds & £10k in a S&S ISA too, but no real lumps in bank accounts. We were going to keep these going and either overpay on the mortgage each month or out that money back into these each month.
Our main aim is to be financially independent by the time we hit 60 (15 years to go), so we can look at retirement or going part time.
Thanks a lot (and point taken on the forum as well!).
Thanks0
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