Paying 16k off mortgage or invest 16k?

Spudder_2

Hi, I have just had 16k made available to me from an old endowment policy that is no longer jioned to any mortgage. I have a 48k mortgage at present, should I pay off the 16k or keep it, invest it and hope it make more in the short time I have left to finish my mortgage(3 years left).

cheers for any advice.:D

simonleblank

Given the volatility of equities at the moment, I would pay off part of the mortgage if no penalties apply, just my opinion though

poppy10_2

Depends what rate you are paying on your mortgage

Capricorn_One

You could always remortgage to an offset deal and put the £16,000 to work that way. I got a fee-free tracker offset with the Newcastle BS.
It'd effectively be an overpayment on your mortgage, as the interest payable would only be on £32,000 but you would still have access to the money.

I've got about £16,000 coming to me next month from selling an endowment and that's what I'll be doing.

Jonbvn

It really depends on what your mortgage interest rate is.

Could you put some of the 16k into an cash ISA, assuming that the ISA rate is higher than your mtg rate?

sandy2_2

I'd pay off 10or12K of mortgage and have the rest in an accessible account so you could treat yourself, afterall you paid in long enough to get the money and you've only got 3yr left on your mortgage anyway

jonesMUFCforever

Spudder wrote: »

Hi, I have just had 16k made available to me from an old endowment policy that is no longer jioned to any mortgage. I have a 48k mortgage at present, should I pay off the 16k or keep it, invest it and hope it make more in the short time I have left to finish my mortgage(3 years left).

cheers for any advice.:D

That's a lot of money to pay off in 3 years. Do you have other endowments to pay off the difference?

Given the volatility of the markets I would play safe. Who knows how the markets will go in the short term - IMO anything under 5 years should be considered short term.