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

snickpan
Posts: 175 Forumite

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
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

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Comments
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If I was you my first thought would be to investigate paying this money into pension - that was you could claim back income tax.1
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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.1 -
Probably this thread should be moved to the mortgage free wannabe board?Statement of Affairs (SOA) link: https://www.lemonfool.co.uk/financecalculators/soa.phpFor free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.1
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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 feelMortgage 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!!!1
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