Pay Off Mortgage or Invest or Something?

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  • jimjames
    jimjames Posts: 17,625 Forumite
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    magic79 wrote: »
    At first i thought the fees would be a waste, but i think the fee is equivalent to the amount of interest that is going accumulate between now and the end of the my 5 year fixed term. So either way i'm paying it, if i understand it right.

    Except if you pay the fees up front then you no longer have that money and are paying out interest. If you keep the money until the fee is no longer due then you'll be able to earn interest on the money or get investment growth on it rather than starting from zero again.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • planteria
    planteria Posts: 5,321 Forumite
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    edited 13 October 2018 at 6:06PM
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    magic79 wrote: »
    Well based on my current mortgage, for 22 years, its £15k worth of interest. To pay it off early, like today, the fee is £2700. Gotta wait 4 more years until it's fee free.

    i definitely wouldn't do that. perhaps you could pay the mortgage right down, but just leave it in place for the 4 years?

    but rather than that, i would probably leave the mortgage in place for now and just invest all you can: set up a Pension and a S&S ISA. you are making enough money to be able to both invest and clear your mortgage simultaneously, going forwards.
  • Zero_Sum
    Zero_Sum Posts: 1,567 Forumite
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    magic79 wrote: »
    No i do not currently pay income tax, i'm out of the country too much.
    What other ways of saving for retirement are you referring to please?

    What rate you paying? As you could be better off putting overpayment money into regular savers & fixed term bonds. Ive got 25% of the value of my mortgage (which is earmarked to overpay/pay off) in fixed rate account instead paying 0.4% more than mortgage which matures the same time as mortgage deal is up. On top of that getting 5% on regular savers instead of over paying regulary
  • astedman
    astedman Posts: 3 Newbie
    edited 13 October 2018 at 9:41PM
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    magic79 wrote: »
    Should i go see a financial advisor? Is my situation relevant for that kind of thing

    Absolutely. Asking here is asking for financial advice and people should really be qualified to answer. I worked offshore for many years in the O&G industry and have a great FA, if you’d like to have their number just send me a message and I’ll share.

    Thanks,

    Alex
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    magic79 wrote: »
    No i do not currently pay income tax, i'm out of the country too much.
    What other ways of saving for retirement are you referring to please?

    I don't know enough about expats to give you a useful answer. What you need is an IFA ("I" = Independent i.e. not a salesman) who is expert at this game - preferably knowing about both the UK tax regime and the tax regime of the country you earn in.

    I wouldn't be surprised if you ended up investing in Stocks and Shares via a jurisdiction such as Jersey, Guernsey, Isle of Man, Bermuda, or the like. But that's just a blind guess.

    My own suspicion is that S&S are so highly valued, especially in the US, that they could be heading for real trouble. So in your shoes I'd ask my IFA to discuss some non-equity investment too - which might well include paying down your mortgage as quickly as you can without attracting penalties.
    Free the dunston one next time too.
  • Zero_Sum
    Zero_Sum Posts: 1,567 Forumite
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    astedman wrote: »
    Absolutely. Asking here is asking for financial advice and people should really be qualified to answer. I worked offshore for many years in the O&G industry and have a great FA, if you’d like to have their number just send me a message and I’ll share.

    Thanks,

    Alex

    Dunno mind. I once went for a mortgage with an FA & he was clueless. Have had a debate with someone claiming to be an FA on another forum (again mortgage related) and advice they were dishing out was really worrying.

    I do think this place does offer up some good advice by people with a bit of hands on experience.
  • bd10
    bd10 Posts: 347 Forumite
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    Unless you cannot get returns in excess of the mortgage interest rate, overpaying or paying it down early makes little sense in my opinion. Mortgage interest rates are still the cheapest in town.
  • magic79
    magic79 Posts: 18 Forumite
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    jimjames wrote: »
    f you keep the money until the fee is no longer due then you'll be able to earn interest on the money or get investment growth on it rather than starting from zero again.

    Thats very true, hadn't thought of that, thanks.
    planteria wrote: »
    perhaps you could pay the mortgage right down, but just leave it in place for the 4 years? i would probably leave the mortgage in place for now and just invest all you can: set up a Pension and a S&S ISA.

    I'll definitely over pay it, i've already done the max for this year and will max it out next year for sure. Based on what yourself and JimJames have said, i'll wait until the 4 years have passed to pay it off fee free.

    Pensions, S&S and ISA’s are on my list now, currently looking it, thank you. Ive seen the work SIPP mentioned on here too, so checking that out.
    Zero_Sum wrote: »
    What rate you paying? As you could be better off putting overpayment money into regular savers & fixed term bonds. Ive got 25% of the value of my mortgage (which is earmarked to overpay/pay off) in fixed rate account instead paying 0.4% more than mortgage.

    Oh maybe i wont overpay then, my rate is currently 1.99%. I'll look at savings accounts too. The one i have with Santander sucks anyway.

    A couple of you have mentioned that i should see an IFA, so ill book one next week. Might be able to give some guidance on the pension thing at least. But i won’t agree to anything straight away without doing a bit of research first. Im always a little bit sceptical with these kind of people that they don’t have other interests associated to any advice they give you.
  • Peelerfart
    Peelerfart Posts: 2,177 Forumite
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    Please post back OP, let us know what's said with your IFA.
    Space available for rent
  • magic79
    magic79 Posts: 18 Forumite
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    Peelerfart wrote: »
    Please post back OP, let us know what's said with your IFA.


    I spoke to a local IFA, and it sort of helped but not really.


    The first thing they said was to move some cash to a different institution, because i have over £85k in a single bank. Fair enough.


    They said a pension would not be the best way to go because i couldn't, at the moment get tax relief. So they wanted me to invest with them into a S&S ISA, to use up my £20k allowance for this year and then do the same next April.


    They phoned me the next day though and said couldn't open an S&S ISA because im currently non-resident in the UK. Is that correct?
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