Save for children's future or overpay mortgage?

mylifemyrules

Hi, 
I was planning on putting aside around 150 a month for my children's futures or am I best to save this money towards paying a chunk of the mortgage off in say 13 years time that would reduce my mortgage payments and probably give me a additional 200 to 300 a month. What do you think? 

cloud_dog

mylifemyrules said:

Hi, 
I was planning on putting aside around 150 a month for my children's futures or am I best to save this money towards paying a chunk of the mortgage off in say 13 years time that would reduce my mortgage payments and probably give me a additional 200 to 300 a month. What do you think? 

Life is all about choices, in finding a balance with the finite monies we have available.

There are many choices you could make, many options, for example split the money (£xxx mortgage / £xx for child), or save all the money for the child until it reaches a certain amount and then switch to the mortgage.  The options are almost endless.

You need to think in terms of your circumstances.  Might there be more children, and how would you manage that? Is the mortgage a big financial factor for you, e.g. intermittent work if self employed, could you get below a lower LTV threshold if applying it to the mortgage, are you on a deal at present and how long is that got to run?  Only you have the information for this and without knowing all the ancillary aspects to your finances it is virtually impossible to offer a considered opinion.

Albermarle

Do not forget about yourself or your partner. What about your pension, retirement plans etc ?

This is currently on the main MSE website.
Martin Lewis on mortgage rates: 'Millions can save £10,000s overpaying their mortgage – but others should save instead. Which are you?' (moneysavingexpert.com)

Cus

Can you earn a higher interest on the savings than the rate on your mortgage?

jimjames

Cus said:

Can you earn a higher interest on the savings than the rate on your mortgage?

Or invest the money for a potentially higher return over 13 years

MEM62

jimjames said:

Cus said:

Can you earn a higher interest on the savings than the rate on your mortgage?

Or invest the money for a potentially higher return over 13 years

Absolutely this.  If you are looking at a 13- year horizon, why not invest?  

mylifemyrules said:

I was planning on putting aside around 150 a month for my children's futures or am I best to save this money towards paying a chunk of the mortgage off in say 13 years time that would reduce my mortgage payments and probably give me a additional 200 to 300 a month. What do you think? 

I think that questions are often put as an either-or decision when they do not have to be.  Why not split the money and do both.