Do higher interest rates change your thinking on investing vs paying down mortgage debt

Albermarle

simon_or said:

Interesting to see the wide variety of approaches outlined in this thread.

I'm pumping as much as I can into my pension and s&s ISA. Like the original post in the thread I'm a bit torn about whether instead of the s&s ISA I should consider putting money in a 5 (or even 7 years if available) year fix at close to 5%.

As for my mortgage, I carry an interest only mortgage by deliberate choice, currently at 60% LTV. The aim is to slowly (or when I can access my SIPP) get it down to 40-50% LTV by the time my wife turns 55-60 and then convert it to a later life lending product that will be paid off on death. No intention to leave the property to my kids.

Everybody ( at least those who give some thought to their finances as many do not ) will always have a different view on the balance between mortgage/debt; savings; investments; pensions and current expenditure. It depends on your circumstances, how much disposable income you have ( if any) and your personality. There is no right and wrong.
However I think inevitably an increase in savings rates is going to move that balance for some people towards holding more cash/investing less, but I do not think it would be to wise to make a major change to your long term strategy altogether, just based on the current situation.