Mortgage or invest?
Discussion
Evening
Recently sold my rental and have circa 140k spare. Currently owe 137k & 0.97% ending in nov this year. My wife and I can put 80k in cash isa’s and drip feed the rest over the next few years.
Reading into stocks and shares isa’s gets me overwhelmed, everything points to vanguard etc.
Any pointers on what to do? Clear mortgage or invest?
Thanks
Recently sold my rental and have circa 140k spare. Currently owe 137k & 0.97% ending in nov this year. My wife and I can put 80k in cash isa’s and drip feed the rest over the next few years.
Reading into stocks and shares isa’s gets me overwhelmed, everything points to vanguard etc.
Any pointers on what to do? Clear mortgage or invest?
Thanks
YouWhatAgain said:
Simpo Two said:
It's a toughie. I think now is a good time to invest, but I also don't like debt, and borrowing to invest is generally not a good idea.
He s not borrowing to invest, it s spare cash. Put it to work in a S&S ISA. ^
£137k loan at 4.6% on a 10 year term is £1400/month for a repayment mortgage versus £1200/months at 1%. £137k isn't a massive loan so the difference interest rate isn't massive especially if OP hasn't got long left on the term.
So paying off the mortgage will mean the OP doesn't have a regular outgoings from the mortgage - But it means OP will lose the opportunity to invest that money.
We are all different with our attitudes to financial risk, personal circumstances etc.
£137k loan at 4.6% on a 10 year term is £1400/month for a repayment mortgage versus £1200/months at 1%. £137k isn't a massive loan so the difference interest rate isn't massive especially if OP hasn't got long left on the term.
So paying off the mortgage will mean the OP doesn't have a regular outgoings from the mortgage - But it means OP will lose the opportunity to invest that money.
We are all different with our attitudes to financial risk, personal circumstances etc.
With current levels of volatility chucking large amount of money in funds is a risky business. You can be caught offside; better ways of gambling.
Money market £80k between now and October and then final decision can be taken. By then markets can be down substantially so might have better prospects of future returns.
Money market £80k between now and October and then final decision can be taken. By then markets can be down substantially so might have better prospects of future returns.
Blue_star said:
With current levels of volatility chucking large amount of money in funds is a risky business. You can be caught offside; better ways of gambling.
Money market £80k between now and October and then final decision can be taken. By then markets can be down substantially so might have better prospects of future returns.
Not sure what gambling has to do with this thread, we are talking about investing. Not the same thing. Money market £80k between now and October and then final decision can be taken. By then markets can be down substantially so might have better prospects of future returns.
YouWhatAgain said:
Blue_star said:
With current levels of volatility chucking large amount of money in funds is a risky business. You can be caught offside; better ways of gambling.
Money market £80k between now and October and then final decision can be taken. By then markets can be down substantially so might have better prospects of future returns.
Not sure what gambling has to do with this thread, we are talking about investing. Not the same thing. Money market £80k between now and October and then final decision can be taken. By then markets can be down substantially so might have better prospects of future returns.
Look at it this way - if you were mortgage free would you take £140k of equity out your house to invest in the stock market? Unlikely.
For me - and I’m sure there will be those that disagree - that logic works both ways.
Pay off the mortgage and start a monthly drip into low cost funds, Vanguard or similar, in tax efficient wrappers - ISA/SIPPs - would get my vote.
For me - and I’m sure there will be those that disagree - that logic works both ways.
Pay off the mortgage and start a monthly drip into low cost funds, Vanguard or similar, in tax efficient wrappers - ISA/SIPPs - would get my vote.
galaxy500 said:
Look at it this way - if you were mortgage free would you take £140k of equity out your house to invest in the stock market? Unlikely.
For me - and I m sure there will be those that disagree - that logic works both ways.
Pay off the mortgage and start a monthly drip into low cost funds, Vanguard or similar, in tax efficient wrappers - ISA/SIPPs - would get my vote.
I was about to post exactly this.For me - and I m sure there will be those that disagree - that logic works both ways.
Pay off the mortgage and start a monthly drip into low cost funds, Vanguard or similar, in tax efficient wrappers - ISA/SIPPs - would get my vote.
galaxy500 said:
Look at it this way - if you were mortgage free would you take £140k of equity out your house to invest in the stock market? Unlikely.
For me - and I m sure there will be those that disagree - that logic works both ways.
Pay off the mortgage and start a monthly drip into low cost funds, Vanguard or similar, in tax efficient wrappers - ISA/SIPPs - would get my vote.
Like the first part of your answer, rings true For me - and I m sure there will be those that disagree - that logic works both ways.
Pay off the mortgage and start a monthly drip into low cost funds, Vanguard or similar, in tax efficient wrappers - ISA/SIPPs - would get my vote.
Having financial security in an appreciating asset that you live in, knowing only CT & bills to deal with appeals more.
If Trump carries out his treat for Tuesday any invested funds will tank again & where will interest rates be if this continues for months
Stock markets have a habit of occasionally crashing, for example in 2008 the S&P500 dropped 38% and took over 5 years to get back to where it started.
That's a big loss to bear if you find yourself being a forced seller during such a period eg. because of job loss or some unexpected life event.
What's your time horizon for the investment?
That's a big loss to bear if you find yourself being a forced seller during such a period eg. because of job loss or some unexpected life event.
What's your time horizon for the investment?
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