Help please, stocks & shares isa or pay down BTL mortgage

qwertyqwerty

Hi all

I hope this is the right forum to ask in, I have approx 45k savings to invest in.  On my BTL mortgage I have 68k left to pay.  I have a new 2 year deal commencing soon at 1.95%.  I'm unsure if I should place all the money to get this mortgage down or whether i should go 25k into mortgage and the rest into VS60 ISA.  Any opinions?  Thanks.

tebbins

When it comes to residential mortgages the forum is split 50:50, when it comes to BTL I'm willing to bet the consensus from the heavyweights will be that your suggestion - based on the limited information provided - appears sound.

csgohan4

depends on your own investment strategy, emergency fund status, retirement plans e.t.c.

I've seen some on here who go interest only on their residential mortgage and go all in investing, which is a reasonable strategy as well, if you know what your doing. 

unkle

csgohan4 said:

depends on your own investment strategy, emergency fund status, retirement plans e.t.c.

I've seen some on here who go interest only on their residential mortgage and go all in investing, which is a reasonable strategy as well, if you know what your doing. 

Thats what I do, the question is can you make more investing, comfortably, than the mortgage rate. My residential is sub 1% so the risk is minimal, averaging around 11% return the past 3 years so paying off so far.

steampowered

It makes sense to make the most of your stocks & shares ISA allowance:

- Returns on stocks & shares are superior to BTL
- Returns on the ISA are completely tax free
- Your annual ISA allowance is "use it or lose it"

csgohan4

unkle said:

csgohan4 said:

depends on your own investment strategy, emergency fund status, retirement plans e.t.c.

I've seen some on here who go interest only on their residential mortgage and go all in investing, which is a reasonable strategy as well, if you know what your doing. 

Thats what I do, the question is can you make more investing, comfortably, than the mortgage rate. My residential is sub 1% so the risk is minimal, averaging around 11% return the past 3 years so paying off so far.

Unfortunately some on here seem to think Crypto and individual shares YOLO is the way to go. But as I said, if you know what your doing, it would be a reasonable strategy

unkle

csgohan4 said:

unkle said:

csgohan4 said:

depends on your own investment strategy, emergency fund status, retirement plans e.t.c.

I've seen some on here who go interest only on their residential mortgage and go all in investing, which is a reasonable strategy as well, if you know what your doing. 

Thats what I do, the question is can you make more investing, comfortably, than the mortgage rate. My residential is sub 1% so the risk is minimal, averaging around 11% return the past 3 years so paying off so far.

Unfortunately some on here seem to think Crypto and individual shares YOLO is the way to go. But as I said, if you know what your doing, it would be a reasonable strategy

Mine is in my wife's and my ISA's, spread over around 18 funds so pretty diverse. I know of course investments can go up AND down, however a regular monthly payment over 5-10 years should exceed 1% but I understand the risks.

lulabelle1

Similar situation, 64k o/s on B2L - was on a repayment mortgage. Approx 1 year ago I switched to interest only, with no plan to repay until I sell the property in 18 years. All monthly "profit" (after mortgage, tax, costs etc) is invested in to S&S ISA (LS80). About to switch to 1.98%, 5 year fix, no fee. Seems a no brainer, but only hindsight in 20 years time will tell me if it was a good idea. Emergency fund in place, residential mortgage paid off. 

Albermarle

As opposed to an ISA , putting the extra in a pension would be more tax efficient, especially if the idea is to build up funds for retirement.

jimjames

tebbins said:

When it comes to residential mortgages the forum is split 50:50, when it comes to BTL I'm willing to bet the consensus from the heavyweights will be that your suggestion - based on the limited information provided - appears sound.

Not sure what you mean by "your suggestion being sound" as the OP was suggesting 2 different ideas.

For BTL I'd personally pay down as little as possible of the capital, interest still gives a tax deduction even if it is lower than before. So paying into S&S ISA and pension would probably be the route I would take.