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Mortgage repayment, which option is best.
NWLondonWill
Posts: 7 Forumite
Hello!
Question for you fine people,
I have an outstanding mortgage debt of £412k, on a fixed rate of 1.44% / 3.4% APR for comparison. Current value of property is £780,000.
It’s an 18 year loan and it’s fixed til nov 2020. I’ve been saving some money on the side (about £100k), and I’m trying to work out if I’m better off: a) putting that money to repay larger amounts of my mortgage (not incurring into an overpay fee), b) saving that money and putting it to lower my mortgage when I renegotiate it in 2020, or c) invest it in something else ( ISA, funds, cash)
Would be good to hear your opinions/ advice, many thanks!
Question for you fine people,
I have an outstanding mortgage debt of £412k, on a fixed rate of 1.44% / 3.4% APR for comparison. Current value of property is £780,000.
It’s an 18 year loan and it’s fixed til nov 2020. I’ve been saving some money on the side (about £100k), and I’m trying to work out if I’m better off: a) putting that money to repay larger amounts of my mortgage (not incurring into an overpay fee), b) saving that money and putting it to lower my mortgage when I renegotiate it in 2020, or c) invest it in something else ( ISA, funds, cash)
Would be good to hear your opinions/ advice, many thanks!
0
Comments
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Pension is often the winner.
If a 40% which you might be with £2k+mortgage payments it is often a no brainer.0 -
It all depends what else you can do with your savings. Can you get a better post tax return on investment than your 1.44%? Unless you’ve got a surefire business deal available, surely the best move is to reduce the mortgage as much as possible in the understanding that the most likely move in interest rates by then is up, and you don’t know what else could happen in the meantime.“What means that trump?” Timon of Athens by William Shakespeare0
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getmore4less wrote: »Pension is often the winner.
If a 40% which you might be with £2k+mortgage payments it is often a no brainer.
Yes, but on the other hand, there’s always the risk that a pension can turn out horrible, whereas reducing the mortgage can only be a success.“What means that trump?” Timon of Athens by William Shakespeare0 -
qwert_yuiop wrote: »Yes, but on the other hand, there’s always the risk that a pension can turn out horrible, whereas reducing the mortgage can only be a success.
With a 32%/42% head start with salary sacrifice against 1.5% it is probably worth the risk.
Lower risk securities can be chosen within the pension wrapper.0 -
getmore4less wrote: »With a 32%/42% head start with salary sacrifice against 1.5% it is probably worth the risk.
Lower risk securities can be chosen within the pension wrapper.
Not available to everyone. Depends on your employment status.“What means that trump?” Timon of Athens by William Shakespeare0
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