Investing to Pay Off Mortgage - thoughts?

Albermarle

There are many low cost multi asset fund providers that have direct alternatives to Vanguard Life Strategy at a very similar cost .
Some have a UK bias , like Vanguard, and some don't . Whether UK bias is a  good or bad thing is the subject of many debates on this forum .In fact during the recent turbulence all these funds performed pretty much the same anyway,,,,
https://monevator.com/passive-fund-of-funds-the-rivals/

83705628

ian1246 said:

Thanks for the replies guys. I have today made our first overpayment on the Mortgage - £650.00, with £650 available to invest. I think I'll likely stick to Vanguard for investments - I've been considering the Life Strategy 100% Equity Fund, however taking on-board the feedback from some of you on this thread with regards to choosing a more global focused fund, another fund has caught my attention - the Vanguard Global Equity (Accumulation) Fund, which is an active managed fund, meaning higher fee's (0.48%) vs. the normal 0.22%. 

It looks heavily weighted towards the US (52.2% North America), then 19.3% in Europe, 14.7% Emerging Markets & 13.5% In the Pacific - is this likely to be a more suitable fund vs. the Life Strategy 100% Equity - which does look like it is split a bit more equally across the various regions via its various index's? I'm just conscious of the Covid19 situation in the USA & the upcoming US Election and its possible impact on US Economic performance. 

/
They're very similar, both diverse global equity funds.
Last election it was Trump, election before it was debt, election before it was the recession, election before that it was corporate fraud and Iraq, before that it was the dot-com mania and Clinton... There's always something in the news and if you're going to worry about such short term things as elections outcomes you're going to have a hard life investing.
The funds are not weighted toward the US, that's just how big the US stock market is.

Thrugelmir

ian1246 said:

I'm just conscious of the Covid19 situation in the USA & the upcoming US Election and its possible impact on US Economic performance. 

A Biden win would certainly herald a totally different regime in many ways. 

83705628

Thrugelmir said:

ian1246 said:

I'm just conscious of the Covid19 situation in the USA & the upcoming US Election and its possible impact on US Economic performance. 

A Biden win would certainly herald a totally different regime in many ways. 

/
People said the same things about Reagan and Bush as they say about Trump.

coyrls

tcallaghan93 said:

Thrugelmir said:

ian1246 said:

I'm just conscious of the Covid19 situation in the USA & the upcoming US Election and its possible impact on US Economic performance. 

A Biden win would certainly herald a totally different regime in many ways. 

/
People said the same things about Reagan and Bush as they say about Trump.

I have certainly said some things about Trump that I didn't say about Reagan and Bush

RetSol

FWIW, I worked in the public sector for 20+ years from my 30s onwards and was in a good pension scheme.  My priorities in those days were (1) overpay mortgage, (2) buying added years in the pension, (3) invest in a S+S ISA.  20+ years ago, I had a bigger mortgage then than the OP has now in terms of LTV (and interest rates were higher than they are now).  It sounds as though his current housing situation is sustainable even with an expanding family (and he has a good LTV) .  In the circs, if the OP foresees staying in his current job, I might prioritise the pension over the mortgage (remember he is already paying the mortgage loan back if it is on a repayment basis).  This assumes that the OP's pension allows for extra contributions on an advantageous basis (I bought added years in the scheme which provided a guaranteed return).  If additional pension payments are not particularly attractive, I would give priority to overpayments of the mortgage. But without ignoring the S+S ISA option.  I have recently taken early retirement and am reaping the benefits of slowly qdrip-feeding my S+S ISA over the years. 

DiggerUK

ian1246, I'm  definitely a "get real and clear the mortgage first" poster. But as the man said, 'stoopid is as stoopid duz'. Harsh, I know.
But as the woman  said, "those who don't learn from history are doomed to repeat it"

I am of course referring to the mis selling of endowment policies. The mis selling came about primarily because they were sold making out they would eventually provide the funds to clear the mortgage, usually, but not exclusively, associated with interest free only mortgages.

They failed to deliver in  the tens of thousands. You're about to run the risk of making nearly the same mistake, with no chance of compensation. Just pay the damned mortgage..._ 

coyrls

DiggerUK said:

usually, but not exclusively, associated with interest free mortgages.

I would have liked one of them!

DiggerUK

coyrls said:

DiggerUK said:

usually, but not exclusively, associated with interest free mortgages.

I would have liked one of them!

You would have liked an interest free mortgage??? 

I don't know if I should put you in the group known as "stoopid is as stoopid duz" or the group not capable of learning the lessons from history..._

kinger101

DiggerUK said:

ian1246, I'm  definitely a "get real and clear the mortgage first" poster. But as the man said, 'stoopid is as stoopid duz'. Harsh, I know.
But as the woman  said, "those who don't learn from history are doomed to repeat it"

I am of course referring to the mis selling of endowment policies. The mis selling came about primarily because they were sold making out they would eventually provide the funds to clear the mortgage, usually, but not exclusively, associated with interest free mortgages.

They failed to deliver in  the tens of thousands. You're about to run the risk of making nearly the same mistake, with no chance of compensation. Just pay the damned mortgage..._ 

I comparison with endowment policies hardly seems accurate (though the thread title is slightly misleading).  For one, OP isn't expecting investment returns to pay off their debt.  They've just decided to divide spare income equally between mortgage overpayments and equity investments.  Secondly, nobody is misselling the the promise the the investments will yield a return of X.  OP is going into this knowing that on average returns will be better than mortgage interest, but the risk is all theirs.

I happen to think the 50/50 split is fairly sensible.  They're hedging their bets.

I don't recall interest-free mortgages?  I might be mistaken, but I think they were interest only mortgages.