Remortage to invest

ginstars

I've noticed that banks are offering very low fixed term mortage rates right now, e.g. 2.44% for at 10 year fixed mortage.



I effectively own my flat outright (I'm paying off the loan to family members at inflation rate only). I still owe £34,000 and the flat is currently worth about £180,000 (I bought it for £126,000 in 2009).


Is it worth getting one of these fixed rate mortages for a relatively small amount (£10,000 for example) and putting it in a low-risk investment ISA (I'm currently filling an Abundance Innovative Finance ISA) or is that just stupidly risky?



The numbers definitely add up, and the risk is fairly small if I stick to low-interest, low-risk investments (e.g. those in the 5-8% bracket) and spread it across a few different debentures. But I'm quite debt-averse and can't quite believe it's a good idea to take on debt when I don't need to.



Any advice welcome!

Thrugelmir

Low risk isn't risk free. 8% yields in the current climate suggest a high degree of risk i.e. capital loss.

LRmortgage

Most lenders will not lend for investment purposes. Although there are some exceptions.

enthusiasticsaver

I would consider that too risky.

somethingcorporate

If you are willing to put the effort in there are probably enough current and regular savings accounts to get 4-5% across £10k. There's also plenty to be made from bank account switching again with hassle but no risk to cash.


If I had £10k sat around I would do this, would I go to the effort of borrowing to do it? No. You would be better off with a low rate personal loan as at least it's not secured on your property.