30k To Invest!!!!

wuzzbert

I have 30k saved up (9k in NSI isa, 21 in cahoot savings) and I owe 46K on a house worth 150k approx. I earn 34K a year and am single.

What would you do financially if you were me???

dunstonh

You say invest. So that means you want to take on risk based investments for a term in excess of 5 years.

What sort of risks are you willing to take (perhaps better asked as how much would it have to go down in value before you got cold feet and pulled out)?
What is your tax position?
What is the aims and objectives of this money?
What is your knowledge and experience of investing?

Delmonte_3

How about paying your mortgage down to just £16k and enjoying the improved quality of life (provided by extra disposable income) to be had there?

The downside risk is the lack of fallback provided by savings although you can recover some by the sale of the house in an emergency.

Fred123987

I was in a similar position. Paid the mortgage off 4 years ago. Haven't looked back since. I now have free cash each month. I have been able to invest and not worried that I am paying loads of interest to the bank, while my money is shiking with the falling market....

Max_Headroom_3

wuzzbert wrote: »

I have 30k saved up and I owe 46K on a house worth 150k approx.

My take on it has always been this.

If you remortgage another £20K out of your house and put it into savings you'll have £50K saved up, and owe £66K. Would you think that a sensible thing to do? Probably not, so look at it another way.

If in fact you current situation was that you had £5K in savings and a £21K mortgage would you remortgage to put you where you are now (£30K savings/£46K mortgage)? Probably not but that's the situation you're in.

I'd keep £5K liquid for a "rainy day" and pay the rest off your mortgage and keep your mortgage payments the same. Your mortgage will drop muchg quicker as you'll be paying a load less interest.

It's what I did (well, I never saved in the first place, just poured any potential savings into the mortgage).

Pendle_Gazza

My personal choice - not expert advice - would be to keep your savings, but drip feed bits of it on monthly overpayments on your mortgage - say £250-£500 - to reduce it's term quite significantly (assuming its a repayment mortgage).

You could use the Egg mortgage calculator to see how it would affect you (it's an eye opener to watch the graph change just by chucking a few different figures in) http://new.egg.com/visitor/0,2388,3_54988--View_1028,00.html

Max_Headroom_3

Why drip feed it in rather than pay it all in in one hit (assuming his mortgage will allow this?)

Every pound that goes in there is a pound less costing him interest so why put £500 in this month, £500 next month etc? Next months amount won't save him any interest till it hits his account in a months time, pay it in now and it helps him now.

Pendle_Gazza

As I said, that would only be my personal choice. I would, myself, rather have some savings to fall back on in case I lost my job or such like.

Max_Headroom_3

I think that's sensible. But even so, surely best to choose how much you wish to have in savings and bang the rest straight into the mortgage? That way it's all working for you in reducing the interest you are paying to the maximum amount straight away.

Bear in mind also that it's not just the difference in interest rates between your mortgage and your savings rate, you've also got the advantage that the money you are saving in interest by paying it off the mortgage is tax free, whereas any interest you earn having it in savings may be liable for tax.