Low risk investment/s or save cash

Stevensuperbike

Considering I may well save 24k in year 1 the maximum overpay I could do is 10% (10,500) subtract this from 24k is 13,500 (x5% is £675 in charges... that's roughly my water bill + car insurance paid for the year I'd be throwing away...

TheShape

Stevensuperbike wrote: »

Considering I may well save 24k in year 1 the maximum overpay I could do is 10% (10,500) subtract this from 24k is 13,500 (x5% is £675 in charges... that's roughly my water bill + car insurance paid for the year I'd be throwing away...

If you do decide to overpay you should almost certainly only overpay as much as you can without incurring a penalty.

sevenhills

Stevensuperbike wrote: »

If we do save the cash in the bank on a plus note it remains disposable if needed rather than locked away. Many thanks in advance.

I like risk myself, sounds like you are not entirely committed, if you think you need disposable income.
I put money into shares, but that wouldnt be for you.

Dorian1958

How old are you and what are your pension arrangements? If appropriate you or the spouse could consider paying more into these, benefitting from the tax advantages then paying off the mortgage with a tax free lump sum. Obviously depends a lot on age, current pension arrangements and attitudes to taking a long view.

Stevensuperbike

I'm 33 and not experienced in investing as I have never considered it or researched it for my own benefit. I thought about paying into mine & wife's pension to take advantage of the tax relief but understand this money will be locked away until I'm in my 50/60s. (I do agree it is a attractive alternative as your getting the extra 20% on contributions which no investment or savings pot could give you this type of return).

Alexland

We are in our mid to late 30s and could have cleared our mortgage a couple of years ago if we hadn't made such high Pension, LISA and S&S ISA contributions.

Our mortgage is currently worth around 12% of our total assets and I just fixed it with no fees for 5 years at just over 2% which I expect to remain at or below inflation. I see it as useful leverage in enhancing the above-inflation long term returns expected from our tax efficient investments. I expect to run the mortgage until I retire early in circa 20 years.

We are a bit like a DIY investment trust.

Alex

Stevensuperbike

Thanks for the advice. We keen to get this mortgage paid for so it's no longer a liability. Our expenses are low and we try and keep to budget, food, clothes ect. I would consider buying another property when our house is paid so we can rent out or possibly looking at a few properties with buy to let mortgages, not sure about this as yet. Let's get the next 4yrs on track first and be consistent with our plan. Looked into the LISA thanks, I would also consider putting into my workplace pension as would get a small bonus from employer going this route. Def worth considering maxing our all available LISA, ISA for me and wife tho thank you.

Voyager2002

You might consider peer-to-peer lending. Unlike stock market based investments, this might be suitable for the short space of time (four years) for which you would want to hold the investment. Obviously it carries some level of risk.


You should certainly make the most of all the bank accounts available that offer decent interest on limited amounts (Nationwide and TSB at 5 per cent; Tesco at 3 per cent; some others...) and explore the Santander 1-2-3 account.

danm

I can’t check exact numbers for you but one approach would be as follows - assuming you can’t get the regular savers

Pay as much as possible off mortgage each period - let’s say £1000 per month

Put remainder each month into a high interest saver- let’s say Marcus bank. At the end of each year, take whatever is in the Marcus account and lock it into a fix rate saver...so after yr 1 take the balance and get best paying 3yr savings product- from memory I am getting over 2% with atom - each year structure the maturity of the fix rate to the time horizon when you want to redeem the mortgage.

Stevensuperbike

Great stuff thanks for the advice. So in theory I could save in the Marcus bank and get the 1.5% return on it for 12 month. Then put whatever is accumulated into a 3yr fixed saver from Atom at 2.4% ? For years 2.3.4 what would I do with the money accumulated ?