What would you do in my shoes?

Sweetie83

Hi, my mortgage currently is £308,000. I sadly lost my dad in 2019. He left me money bless him. I still have £75k. I’ve already overpaid £30k with it. Would you use most of the rest to overpay mortgage? 

Thanks in advance

edinburgher

There are lots of things to consider, personally I'd be paying such a windfall into pensions and ISAs, but we all have different goals. Might be worth thinking about your existing retirement arrangements, any emergency fund in place (or needed) and perhaps any other expensive one time home improvements that might increase your quality of life and the value of your home?

A_Frayed_Knot

Sorry for your loss.

That's also a huge mortgage, but you don't say how long you have left on your mortgage, if your employment is safe, and how old you both are and if and when you have plans to retire.

So a lot depends on the facts. and what emergency fund you have.  I would make sure I had enough EF 1st, although didn't do that when o/p my mortgage but I knew my job wasn't going anywhere, safe and secure especially now with world events taking place.

Good luck on whatever you decide.

SandyShores

Check your mortgage documents, mine says I can only make 10% overpayments each year of having the mortgage.  If it was me I would make up the maximum overpayment for this year, then store it in premium bonds until I could pay it to the mortgage as overpayments.  If you put the details into the overpayment calculator you will see exactly what you would save with the overpayments - I put some random figures in and with a 10% payment it showed about £27k saved in interest and knocked 6 years off the mortgage for every £30k overpayment.  Lovely position to be in, but condolences for the loss of your dad.

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

Sweetie83

Thank you so much for the advice that’s been really helpful. My husband and I are both 37, two daughters as well to consider and a few home improvements but they tend to come out of our wage. I luckily come from a safe position employment wise. Both civil servants with very good pension (we pay 5% they pay 16%) been there for 11 years and have a job for life if I want it. 

I think to keep some back for EF is a good advice and then pay my mortgage down with rest would be good within 10% limit is good idea. And premium bonds whilst I wait. Mortgage is 22 years so need to bring the term down as well. I’ll get there and my dad would be pleased he played a massive part.