Pay of mortgage or split into bank accounts and let the inerest pay for it

Tonyteeth

Good evening i am after a little advice if somebody can help me out.I am about to get a lump some of money and i am unsure as whether to pay off my mortgage,which currently stands at around £70 000 (£490 pcm) or invest the lump into various secure bank accounts with returns of interest of 1.4%.The sum I am due to get is around £380 000.

Do I keep my hands on that mortgage money or pay it off.

thanks

longway2go

Everyone's situation is different, for me I would clear it because I like the thought of not having a mortgage.

Things to consider is the rate of your mortgage against the interest you could earn in savings. Also if you have any penalties for paying the mortgage early and if so if it is worth paying these vs the interest you may save.

Also could the money be better used for a pension purpose?

A_Frayed_Knot

As lw2g says, everyone is different.

Me - with that kind of sum - I would pay it off, you still have a massive lump sum left.
All depends on your future plans and what stage you are at, eg retirement, or still working
for the next 30 years or so.

If you were only getting say £80,000 on your lump sum - a different story. Are you really going
to miss £80,000 out of your £380,000 ?

Is your mortgage rate lower than 1.4%?

Good Luck, nice position to be in :j

Tonyteeth

Thanks for your replies,i am only in my late 40 s,had enough of the stress and pressure so simply just going to take a rack off,,plans are to get into property renovation but simply do them up then sell.

That way I can choose my days,hours etc that I work.

Regarding the mortgage rate that is something that I am going to have a look at,not quite sure off the top of my head

Socajam

Tonyteeth wrote: »

Thanks for your replies,i am only in my late 40 s,had enough of the stress and pressure so simply just going to take a rack off,,plans are to get into property renovation but simply do them up then sell.

That way I can choose my days,hours etc that I work.

Regarding the mortgage rate that is something that I am going to have a look at,not quite sure off the top of my head

Since you plan on going into this area of business, I would clear my mortgage, put aside an emergency fund (25,000) and life happens (25,000) and use the remainder to start your business.
If the crap hits the fan, you will have a house that is free and clear and both a EF and LHF to fall back.
A word of warning: DO NOT mortgage your house to help your business, it's a fool that does something like this.
If business is failing, get the hell out and do something else.

Tonyteeth

Socajam wrote: »

Since you plan on going into this area of business, I would clear my mortgage, put aside an emergency fund (25,000) and life happens (25,000) and use the remainder to start your business.
If the crap hits the fan, you will have a house that is free and clear and both a EF and LHF to fall back.
A word of warning: DO NOT mortgage your house to help your business, it's a fool that does something like this.
If business is failing, get the hell out and do something else.

Thanks for that,yes I have those bases covered and wouldn't use my bricks and morter to fund the project.
I have worked far to hard to lose the roof over my head,,Fortunately I live in an area where property is reasonably priced so getting started wont put me in to deep