Mortgage or Pension

uklondonrock

I am paying extra on my mortgage by doing this will finish by September 2020. But I am thinking stop paying extra that would be about £800.00 per month and putting in the £800.00 plus more funds into my pension pot.
The reason this would take my income below 40% income tax freshhold keeping me under £463500.00 every pound abover that figure 0.40p goes to the Tax man.

Pay off the mortgage fist then put into pension or cancel extra payments to mortgage put in to pension, my mortgage would end then summer 2021. Thanks for any help John.

tacpot12

In your case, paying more into your pension will save you more than repaying early.

miss_undastood

How much extra interest would you pay for the extra years mortgage vs how much do you save in tax?

40% of £800 is £320 * 12m = £3,840 in tax saved.

I think that will be more saved than you’d pay in interest so a no brainier?

Happier_Me

In your case, pension first because of the tax savings.