Windows loan

System

This discussion was created from comments split from: Should I get a second loan?.

Haloreach

Hi All, We are looking to raise 15k for new windows to our property which is mortgage free. We do have enough capital in existing investments. I am retired and wife is still working. Is it wise to leave the investments alone and get a loan for the windows? Many thanks.

MinuteNoodles

If you've £15k in investments then no it isn't a good idea to cash them in, likewise if you're living off the income from those investments and cashing in £15k worth would significantly reduce that income to where it was a problem. If you've £30k in investments then yes it is a good idea unless they're high growth. Given how low interest rates are for a £15k loan at the moment there's not a huge cost in interest in taking out a loan over 3 or 5 years. You would pay effectively just over £200 a year averaged over the 3 or 5 year term in interest at 2.9%.

Ultimately though you have those investments to provide you with money to do things when you retire. There's no point having them sat there unused til the day you die otherwise what was the point in saving money over your lifetime to build them up in the first place if you don't use them? Being the richest man in the graveyard always seemed to be lunacy to me. In an ideal world after ensuring you left a few bob to your offspring you'd aim to hit £0 in both money and assets the day you curl up your toes.

[Deleted User]

If the investments are paying less interest than the loan might (and there's no guarantee it would be as low as 2.9%) then paying cash would be the best bet, assuming you have had more than one quote for the job?