To use £50K to pay of some of the mortgage?

JohnEricsson

Outstanding mortgage £187K 
house value between  £850K and £900K
mortgage finish date (redemption?) 2035 . 

I have £50K in the bank doing absolutely nothing. I have no other form of savings or investments. I don't wish to gamble.

The bank (nationwide) have said I can make payments to reduce the outstanding amount.

I will lose a "safety net" if I use the money to reduce the mortgage (eg if i lose my job I will have no mechanism to cover the mortgage) . I am willing to gamble on this.

Is it a no brainer to use the £50K for mortgage reduction?
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housebuyer143

How much is your mortgage interest payments, what percentage? Don't underestimate how valuable cash in the bank is.

JohnEricsson

It is two mortgages. y chance more or less the same amount £88K and £83K, so £171K outstanding. The previous figure I gave was wrong

both are on variable rates but they are different 6%  and 7.49%, if I recall correctly one is "base"????. Not so sure why different but could be something to do with one being a ten year fixed rate which went to variable).

£87K 6% £820 per month
£82K 7.49% £840 per month
both end 2035

billy2shots

At those rates I would work out a contingency fund (6 months essential bills) then pay the rest into the mortgage. 

£900k house but no savings or investments?
Best to look at that. 

saajan_12

JohnEricsson said:

It is two mortgages. y chance more or less the same amount £88K and £83K, so £171K outstanding. The previous figure I gave was wrong

both are on variable rates but they are different 6%  and 7.49%, if I recall correctly one is "base"????. Not so sure why different but could be something to do with one being a ten year fixed rate which went to variable).

£87K 6% £820 per month
£82K 7.49% £840 per month
both end 2035

Those rates are quite high.. can you remortgage one or both to lower rates? 
Also have you maxed out your ISA / pension allowance? 
What do you consider to be gambling - eg a diversified all world index portfolio? 

penners324

Blimey those mortgage rates are high. SVR or bad credit?

If SVR remortgage.

What about your pension funds? A very good place to put that much money. 

Though with interest rates that high paying them down soonest is probably a better option 

Keep_pedalling

You are asset rich and cash poor, reducing your saving even more is a big gamble for someone who does not like to gamble.

Your other thread says you are winding down towards retirement and are reducing your annual income by £25k. In your shoes I would be looking to downsize and clear the mortgage.