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I dunno if I'm a wannabee! Quite comfortable - what to do for the best, lump sum vs mortgage

snickpan
snickpan Posts: 175 Forumite
Tenth Anniversary 100 Posts Name Dropper
edited 12 September at 7:06AM in Mortgage-free wannabe
I have a £600k home with £180k mortgage, and a £600k BTL with a £125K mortgage, and a lump sum of £150k.  It may all just be down to personal preference, no 'best plan' as such - do I pay off as much BTL mortgage as I can, or just enjoy my lump sum.
If I pay off the BTL, I'd get that money back when it sells anyway, it's 5.74% fixed for another 3 yr, no immediate plans to sell. I like the thought of not paying the £595 mortgage payment each month.  I can overpay £499 each month before I get charges.
I feel so unfocused, not happy with the 5.74% int on the BTL mortgage, but I get 4.74% int on my savings.
Am I missing an obvious plan, or is it just much of a muchness.  Maybe overpay a bit of the BTL just to tick a box, and get on with spending my savings?  I'm 60, time is ticking  :)

Comments

  • Mark_d
    Mark_d Posts: 2,748 Forumite
    1,000 Posts Second Anniversary Name Dropper
    If I was you my first thought would be to investigate paying this money into pension - that was you could claim back income tax. 
  • ManyWays
    ManyWays Posts: 1,588 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    I would probably overpay the max on your personal mortgage (probably 10%, but 20% with Natwest), plan to pay an extra 499 a month to the BTL, stick as much as you can into your pension and still get tax relief (you are presumably a higher rate tax payer), use up this years ISA allowance and then contemplate what is left, probably planning to repeat most of these next tax year.

    Oh and clear any debts you have, including car finance.
  • kimwp
    kimwp Posts: 3,195 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    Probably this thread should be moved to the mortgage free wannabe board?
    Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.php

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • South_coast
    South_coast Posts: 6,013 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper Photogenic
    What was your plan for the two mortgages before you had the lump sum? I'm assuming the BTL is interest-only, so paying off chunks will immediately reduce the monthly payments? I don't think you've got much to lose by paying off the max £499/month to the BTL, as this is only going to take £6k out of your lump sum after a year, so a very minor dent in the total. Then take some time to consider the other mortgage/pension/keep the cash options and see how you feel
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
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