To think I’m not crazy for not paying this off?

I would pay £50K off the mortgage, penalty free obviously. Then invest the £20K at the highest rate you can get, or into Premium Bonds if you fancy a gamble. Whatever you can save on paying the mortgage, put into the savings account. That way you have some savings and have also reduced a chunk of the mortgage.

Sorry just place marking as my book marking isn't working & I want to read the thread later.

I agree with you. When you're single, a year or more in salary in the bank is a great safety net. In an emergency - lost job, health crisis - you'd have the option of downsizing, moving etc and the cash to get through the change.

I'd keep at least 18 months salary in savings - enough to lose a job, retrain, get a new one.

Mortgage offset savings sounds perfect, but apart from that I wouldn't prioritise the mortgage. You're locked into that for a long time anyway, and the mortgage is the debt you don't rush to clear - inflation tends to lower it over time. You can change your mind on this if interest rates go up to an uncomfortable level, but for now, I see exactly what you mean about having an extra safety net. Much harder to get that security when you need it most from capital tied up in a house.

£40k into mortgage, £20k into limited access cash ISA, £3k instant access savings, £2k fun, leaving £5k for stocks and shares JISA for your child.

I would definitely investigate switching to an offset mortgage. That way you can have the best of both worlds.

The thing is you'd also be paying less interest on the future debt of the mortgage too if you see what I mean. Even if you just paid off a chunk that would help future you.

when is your mortgage rate up? - for example you pay the 10% off the mortgage this helps MASSIVELY on saving interest. Invest and save the rest (ISA for 20K, High interest 'rainy day fund' £5k etc maybe even a little pension top up as you will be able to take 25% at 57) and then in 2,3 or 5 years (whatever your mortgage is) you have made money on your money, you have saved money on your mortgage and you might have a better idea of your future and can use more of your invested money to pay off your mortgage.

Who is paying an 8% interest rate on savings??

I'd do both

30k pay off mortgage now but don't reduce your monthly repayment amount

Keep 40k cash as security split between Isa / savings account this year then move Al to USA next year

Look at offset mortgages so that it’s reducing the interest you pay but still accessible for a rainy day

Which interest will be higher the one you are paying on your mortgage or the one you can have if you invest that money?
Whichever is the higher if the investment is secure that would be the more sensible approach.
You can opt for a middle solution half and half. In any case it is a big sum to not use it on your favour one way or another.

You may only be able to pay 10% off your mortgage in any one year anyway. That is common with mortgages.

I would at least do that but also put some of the 70k in a high interest savings account

You need professional advice because there are several factors to consider.

In your shoes I definitely wouldn’t pay it off the mortgage, making it illiquid. But depending on your interest rate and monthly expenditure, might decide to make some overpayment on your mortgage (which could be a lump or making regular overpayments).

The other thing is that just because you have cash doesn’t mean you have to spend it. Say you have an emergency fund and you need to make a big purchase. You can take out a credit card with a long 0% period and pay the minimum each month, knowing that you have the cash to pay the balance back but keeping it in the bank earning interest for you. Having the cash there gives you options. Just make sure you’re realistic about how you tend to behave around money!

You are paying a ridiculous amount of interest to the bank right now. I'd put at least £50k towards your mortgage and get the principal down if you can do so without penalty. Put the rest in a high interest savings account.

I’d definitely be looking into a mortgage offset account. Reduces your interest charges, adding to greater repayment on the principal.

YANBU as long as you are wise with it and don't fritter it away.

In your position, as you seem unsure about investments, you could take the risk-free route and put £50K into Premium Bonds, and £20K into an ISA.

Then, I'd use all of your premium bond winnings to overpay on the mortgage.

That's just a very simple way to use it without risking it.

£30k on the mortgage. £20k in to an ISA. £20k in to a high interest savings account (or 10k in to savings and 10k in to premium bonds) would be what I would do. Move more in to ISA next tax year unless something has come up in the meantime.

(Edited to add… but yes absolutely professional advice…)

Speak to an IFA if you’re a high earner you can get tax relief on pension contributions too.

You could bring your mortgage interest down by upping your monthly payments as you don't need to throw so much at your savings.

You should also get a decent annual return on the 70k so could use that to make a lump sum mortgage payment too (assuming it's within the overpayment limits allowed).

The only way I might use some capital is if you are close to an LTV bracket and it's worth paying off some to get a better rate when you renew

Look at the MSE overpayment calculator https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

You could easily have the best of both worlds with added security and reduce the term and interest paid on your mortgage.

If it’s low you shouldn’t pay it back because you can probably invest it and make better but if it was fixed high or a variable I think you should pay it down..
so it really depends …

You'd be best taking advice from a professional

And bear in mind your own personal priorities. Mine is to be debt-free. Others prefer to focus on savings

What’s the interest rate on your mortgage?

Tbh I'd stick a chunk in premium bonds then an ISA and have a think for a while. I think there is probably a happy medium here. Maybe half and half? £35k in savings is a good chunk and still allows you to make a significant saving on the mortgage, which you might appreciate when you are a bit older and can retire earlier because the mortgage is gone.

doing the calculations of saved interest etc is wise, but that feeling of security and a large emergency fund is important too. The key is to not squander the money. Make sure you put it somewhere and don’t touch it. Don’t fall into the trap of starting to splurge on a holiday here or a nicer appliance there. Put it in something like a high interest savings account and pretend it doesn’t exist.

An offset mortgage is worth considering. Even with a small amount of savings it can really make a difference to how much to pay back, and knowing you have the access to your savings at any time is great security. I paid off my offset mortgage early because of this.

It all depends on the t&C of what currently available of course, but in your circumstances it seems like the best of both worlds.