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If you inherited £250,000

(37 Posts)
ChilliChipolatas Thu 07-Dec-17 09:38:25

My husband says pay off the mortgage, but I've always been told it's the cheapest loan you'll ever get and you shouldn't pay it off. WWYD?

TiredFedUpGrumpy Thu 07-Dec-17 09:40:15

I'd pay off the mortgage. All that extra disposable income! Plus there are very choppy economic seas in the near future for the UK. Who knows what that will mean for interest rates.

NumberEightyOne Thu 07-Dec-17 09:45:27

A mortgage isn't a cheap loan!

SoapyChoc Thu 07-Dec-17 09:48:17

I'd pay off the mortgage, if you have many years left it could save you thousands in interest. I think it's Student Loans they say are the cheapest debt and not to pay off as it's better to keep the money for saving for a house deposit/paying more of a mortgage as it's so much more expensive.

wowbutter Thu 07-Dec-17 09:49:45

I would pay off my mortgage, which would mean we have more money each month, and if one of us lost a job or got ill we would be in a much secured position.
But a new car.
Put 30k away.
Have an ace holiday.

Corroboree Thu 07-Dec-17 09:51:46

I'd leave my husband... but that's probably not the advice you're after!

Pay almost whole mortgage off... or you could move somewhere nicer/bigger/more suited to your needs.
Also, do you have children? I'd earmark a huge amount to invest for their university fees so their not stuck repaying for 30 years.

Peanutbuttercheese Thu 07-Dec-17 09:51:49

There was a time when my 0.5% above BofE base rate mortgage was not worth paying off though we could have. Those days and deals are passed.

Is this just hypothetical dreaming? If you really are going to get that money then yes pay off your mortgage

Blueroses99 Thu 07-Dec-17 09:51:54

It’s relatively cheap in terms of % interest compared to other types of borrowing but the high amount borrowed means it is absolutely more expensive. So I would pay off the mortgage (keeping aside maybe £10k for a holiday and treats).

You will have far more monthly disposable income too.

Pibplob Thu 07-Dec-17 09:52:03

I would def pay off my mortgage! I would love to be mortgage free. The rest I would probably put some in savings and book a nice holiday! Ooh I'm dreaming now!

RestingGrinchFace Thu 07-Dec-17 09:53:45

Definitely pay off the mortgage. Unless your mortgage is 0% apr then you have been misinformed.

Anatidae Thu 07-Dec-17 09:54:05

Small amount set aside for treats.
Half to the mortgage
The rest to long term investments for retirement IF the long term outcome is more than the mortgage interest.

HermioneIsMe Thu 07-Dec-17 09:54:37

Pay the mortgage first wo a doubt.
Then invest that money wisely so I can get some money for that.
I wood also put said money earner by th investment AND the money saved from paying the mortgage as savings again and invest them.

What I wouldn’t do is spending money on a splashy hols, change my lifestyle that much etc etc.

steppemum Thu 07-Dec-17 09:56:16

yes a mortgage is a cheap loan, but if you don't need a loan, why pay to borrow anything?

If you paid off the mortgage, then you would have loads more disposabel income every month, to spend/save as you like. So then effectively you can do all the other things that you might do with the miney, eg buy a new car, go on holiday, it is just that you will need to save for a few months for each one.

Being mortgage free is amazing, and you don't have to ever worry about losing your job, etc, as you wil always have a roof over you head.

The only other thing I might do is spend some of it on a longed for extension/loft conversion, and then pay of a chunk of remaining mortgage.

Cameron2012 Thu 07-Dec-17 09:58:35

Mortgage, holiday, car, home improvements, and the rest locked into a savings fund

GiveMeTheTeaAndNobodyGetsHurt Thu 07-Dec-17 10:01:31

I'm renting, so circumstances are different for me, but:
1. Pay off unsecured debt
2. Buy a house on a low LTV
3. Stick a few grand in savings

steppemum Thu 07-Dec-17 10:02:34

interesting that so many people say pay off the mortgage and then do xx with the rest.

I would have thought in the UK that for most people very little would be left after paying off the mortgage?

TiredFedUpGrumpy Thu 07-Dec-17 10:07:28

Depends how long you've held your mortgage for surely? Granted ours would swallow up nearly all of it but in another 10+ years it would (hopefully!) be a different story.

Pibplob Thu 07-Dec-17 10:08:40

We'd still have £100,000 left if we paid off our mortgage. (Small 3 bed house tho - most people (kids friends) seem to have huge houses and I don't know how they manage that!)

ChilliChipolatas Thu 07-Dec-17 10:14:36

We wouldn't have much money left if we paid of our mortgage and debts and we'd love a loft conversion and extension, also we have a young son and yes I'd like to invest in his future too. It is a huge amount of money as a lump sum, but once you start taking chunks away it would diminish quite quickly. I wonder if I should get financial advice?

ChilliChipolatas Thu 07-Dec-17 10:19:43

Oh and sorry, thanks for your responses, I probably am misinformed (it was something someone told me years ago, that has stuck with me)

whiskyowl Thu 07-Dec-17 10:22:54

I would split it.

- £70,000 for an extension
- £70,000 towards the mortgage
- £70,000 in locked-away savings for your retirement
- £40,000 towards your son's tuition at uni

whiskyowl Thu 07-Dec-17 10:23:13

Oh, and clear any outstanding debts.

HappyVan Thu 07-Dec-17 10:26:27

How much are your mortgage payments per month and how many years left?

BarbaraOcumbungles Thu 07-Dec-17 10:27:43

I’d pay off our mortgage and have an extension.

ChilliChipolatas Thu 07-Dec-17 10:32:14

HappyVan we pay £1,250 a month and have 17 years left on it. We also have 3 years left on our fixed term, not sure if there are any penalties for overpaying or paying off a lump sum. I need to look into it.

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