Would you take this mortgage offer and invest the fund (250K 5 year-fixed rate 1.54%)

NedS

pjread said:

Personally if ignoring the BTL idea, I'd consider chucking it in the markets for the next 5 years - but I have a high risk tolerance and still wouldn't if I had it earmarked for something else.  And given current state of the markets, I would actively try not to pay attention to it more than once a year  

Personally, I do not think now is the time to be taking short-term leveraged bets.

IamWood

NedS said:

pjread said:

Personally if ignoring the BTL idea, I'd consider chucking it in the markets for the next 5 years - but I have a high risk tolerance and still wouldn't if I had it earmarked for something else.  And given current state of the markets, I would actively try not to pay attention to it more than once a year  

Personally, I do not think now is the time to be taking short-term leveraged bets.

My intention is to put them in reasonable savings account for a year and then see what happens.

I may take the opportunity as it looks like a good opportunity to have some funds without much risk apart from a bit hussle? (well for now).

Section62

IamWood said:

With inflation so high and the interest rate catching up. Do you take the funds and invest them (or just put them in a higher-rate savings account).

You may need to check the platform and fund(s) you want to invest in will accept deposits funded by borrowing.

london21

Uncertain times, will invest very cautiously and diversify.

IamWood

london21 said:

Uncertain times, will invest very cautiously and diversify.

Thanks, I'll put them into a saving account for now.

IamWood

My bank called today asking me to make a firm decision as the offer expires next week. 

I was still wondering if it was worth the hassle.

thegentleway

Yes, I would invest but I think most people shouldn't.

IamWood

Cheers @thegentleway. Can you share your thoughts? Thanks

thegentleway

Whilst it’s rational to borrow at low rates to invest for higher returns, humans aren’t rational. We’re emotional. E.g. loss aversion. Knowing this it’s reasonable not to take unnecessary risk. 

It’s essentially the same as pay off your mortgage early or invest. When interest rates are low, investing is the rational choice. However, most people should overpay. It’s not as good financially but they will be happier and sleep better at night.

Albermarle

As above to go all in with £250K could be rather nerve wracking. Normally in these mortgage vs invest questions, the usual answer is to do some of both.