am I an idiot for using a £40k windfall to pay off my interest only BTL mortgage?
I have a fast-approaching dilemma.
I'm in the middle of an exceptionally good year at work (run my own biz) and I'm likely to have about £40k extra earnings by the end of the year.
I have £38K owing on a rental property which is on an interest only mortgage which ends Aug 2023. I'm the sole owner of this.
I have an emergency fund of savings.
My husband and I own about half of our house and are overpaying on your repayment residential mortgage.
We are both actively saving into Premium Bonds with a view to buying a buy to let flat together when the house market cools over the next five years. We have nowhere near enough saved to buy one outright although that's the ultimate aim.
My question is this: if I use £38k of my unexpected business earnings to clear the interest only mortgage on the buy to let place am I making a big mistake?
It seems to me to make good financial sense to clear a debt completely especially as saving money seems a waste of time given the way inflation is eating away at it and how poor interest rates are.
Am I missing anything - I'm keen to hear from IFAs and anyone with a good head for money to have their say on this.
All opinions welcome!
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