150k - which would you do?

I would keep the money invested, as much as possible use mainly the interest and my salary for the school fees; and then use the remaining capital to pay off anything left on the mortgage when DD leaves school.

Investments. You won't get anywhere near that with cash savings. Eg: Global FTSE tracker has moved -1%, +6%, +16%, +15%, +22% in the last 5 years.

Sorry, not giving advice here, but just interested to know how you are making £12,000 interest a year, as I thought rates had lowered?

Keep the money in your current investments, use the interest to overpay the mortgage and reduce the monthly payments (rather then reduce the term, you may need to specify you want to do that with the bank, ours always defaulted to a shorter term) use the money saved from the monthly mortgage to add back to the capital.

Doing this, the capital will rise, as will the interest you will be using for the overpayment and you mortgage will also reduce.

It may not be the most optimum in terms of income but I would want to make some impact on my mortgage. You have no idea if your investments and savings will continue with their current return. You have no idea what your mortgage interest rate will be next time. If you can get a 5 year fixed rate at a decent rate do so!!

I mean, personally I’d buy some land and some goats… but I think we’re probably quite different people. £12k sounds like a good investment so I’d only spend the interest (if I was being sensible).

Generally (and definitely in your case) paying off your mortgage saves you less than you would make by investing the money or putting it in a decent savings account. Though I understand that mentally paying off the mortgage feels better!

Paying off the mortgage also locks that money away - and that's risky, especially as you're fairly young, have a child, and have relatively imminent plans for the money.

They used to be quite common, not so much these days!

You can put money in and take it out whenever you want. When the money is in there, the interest is calculated as if you have paid that money off the capital owed.
I’m self employed and it’s where I save up to pay my tax bill every year. It has saved me a fortune in interest over the years.
It’s nowhere near as good as the 12% you are getting elsewhere though!!

Save it. You can 10% return if you find a medium risk unit trust. With compound interest, it will be c.£427k in 10 years time, then you can pay your mortgage off in full and have spare for the school fees - if you can afford your lifestyle as it currently is in the meantime.

Do you know how much the fees will be?

I honestly couldnt spend £150k on one child education. It just seems a lot. My friend privately educated her 2, one became a builder and one a hairdresser. I just though what a waste!!

Thats what I was thinking!!!! @Forya10

sorry this is not the point of the thread but can I ask what job you do how much you earn after tax?

I just find it fascinating when people live such a different life lol.

honest questions too. genuinely curious.

You are getting a much better rate of return on the money than the mortgage rate. So keep the money where it is and pay the minimum payment on the mortgage. It's so tempting to pay off the mortgage and that's what we did for years but I now realise if you can get a better rate of return elsewhere that's where the money should be.

Well you're making an 8% return on the money at the moment so it makes no sense to use it to pay off a mortgage that will cost you 4.5%
The 12k return and 3k from family must cover a large amount of the fees so you would still have a decent lump sum left once your child has finished school

I’d always keep the capital free, and that’s a good return. How long do you have left on the mortgage?

I assume the 900 is if you use the money to pay down your mortgage.

How does the budget currently look?

How secure is your employment/ income?

I think I would work out how much I need invested to see the child through school. If 150k is too much then I’d pay the excess to the mortgage. If it’s not enough how much needs to come out of the monthly budget to top up the pot? Then the school fees are taken care of.

I would then focus your surplus income on paying down the mortgage.

Imagine paying mortgage then something goes off plan and you have to tell DS to love schools?

Id keep that invested and use to pay school fees. Try and overpay mortgage a little each month

I would keep in premium bonds the amount you need to pay for her education in total. Figure out what you want to keep on top of that as a rainy day fund and then pay off part of the mortgage with the remainder

I’d put half the amount on my mortgage and continue to pay the same monthly amount off it. This should mean you are overpaying your mortgage by quite a lot. Continue to save separately and then if you need to, you can reduce your monthly payment on the mortgage down the track.

Ooh I’m not sure could you do some and some? Keep some back for emergencies etc?

I wouldn’t put all your savings into your house.

You need to make sure you have at least 6 months worth of savings. If you want to add any after that maybe.

That is tough and I guess the school will require extra expense, uniform, trips etc
how old is your child? Do you have time to save again?