HELP: Wondering what to do

slippyg

Hi All,

Bit of background

Mortgage - £163k @ 2.34% (due to end Jan 2021).

House Value - £205k

Savings - £75k

What's my best course of action.  My thoughts are

1) Just continue as I am, paying off mortgage as interest rate isn't big (you may convince me otherwise)

2) Buy another small property at around 80-100k and rent it out

3) Buy a property in Andalusia (a dream but wouldnt use it too often couple times per year so probably a waste)

4) Pay off a large lump off mortgage

5) Move to a larger house

Literally no clue what's best financially, my gut feeling it paying off the mortgage. 

Thoughts welcome

Thanks so much all.

RobM99

Do you have any debt?   If so, might be worth considering paying it up.

Linton

What are your objectives for your future? Your list of things to do includes saving money, earning money and spending money.  Until you have something you want to achieve all one can do is to shrug one's shoulders and say do what you want.

cattie

I'd go with my gut feeling & I'd pay it off the mortgage, it's the best feeling in the world, especially when you clear it extra early. I cleared my mortgage in 12yrs & have never regretted it.

The last thing I'd be interested in is getting into BTL, I'd never want to be a landlord. And I'd certainly not want to buy abroad unless I was choosing to move there in the near future. A bigger house only really makes sense if you need more space as a bigger home tends to mean more council tax, heating costs, water rates, insurance etc. not to mention moving costs, stamp duty & legal fees.

Albermarle

What is your pension situation ? This is usually the best way to save/invest for the long term 

btcp

Many people would say that financially is better not paying off the mortgage because the money is getting cheaper over time, and also you can try to invest somewhere to get a higher interest than you pay for mortgage. However, I made a decision to pay off mine early and take every opportunity to make an overpayment. The reason is simple - it will help me sleep better knowing I don’t have  debts. What if I lose job, what if I fed up with this job and would want to do something different, etc - I have a place to live and not to worry. I am balancing mortgage payment with pension contribution as my pension pot is relatively small. 

I thought of buying a second property overseas but ended up with a conclusion that it will be more work than benefits. I have friends who are retired and rent out a large flat in Spain 6 cold month a year. It would be my choice too, as gives me more flexibility and less responsibilities. 

xylophone

2.34% (due to end Jan 2021).

What interest rate are you getting on the £75,000 of savings?

slippyg

@Rob I have zero debt.

slippyg

Linton said:

What are your objectives for your future? Your list of things to do includes saving money, earning money and spending money.  Until you have something you want to achieve all one can do is to shrug one's shoulders and say do what you want.

  I wish you all the best. 

slippyg

xylophone said:

2.34% (due to end Jan 2021).

What interest rate are you getting on the £75,000 of savings?

Currently only 1% on 20k - Santander 123 a/c

slippyg

Albermarle said:

What is your pension situation ? This is usually the best way to save/invest for the long term 

Final year salary.  Its very good luckily.