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Original poster

If you inherited £250,000

36 replies

ChilliChipolatas · 07/12/2017 09:38

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?

OP posts:
TiredFedUpGrumpy · 07/12/2017 09:40

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 · 07/12/2017 09:45

A mortgage isn't a cheap loan!

SoapyChoc · 07/12/2017 09:48

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 · 07/12/2017 09:49

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 · 07/12/2017 09:51

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 · 07/12/2017 09:51

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 · 07/12/2017 09:51

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 · 07/12/2017 09:52

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 · 07/12/2017 09:53

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

Anatidae · 07/12/2017 09:54

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 · 07/12/2017 09:54

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 · 07/12/2017 09:56

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 · 07/12/2017 09:58

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

GiveMeTheTeaAndNobodyGetsHurt · 07/12/2017 10:01

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 · 07/12/2017 10:02

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 · 07/12/2017 10:07

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 · 07/12/2017 10:08

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!)

Original poster
ChilliChipolatas · 07/12/2017 10:14

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?

OP posts:
Original poster
ChilliChipolatas · 07/12/2017 10:19

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

OP posts:
whiskyowl · 07/12/2017 10:22

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 · 07/12/2017 10:23

Oh, and clear any outstanding debts.

HappyVan · 07/12/2017 10:26

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

BarbaraOcumbungles · 07/12/2017 10:27

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

Original poster
ChilliChipolatas · 07/12/2017 10:32

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.

OP posts:
poisonedbypen · 07/12/2017 10:33

Not always the best option to pay student debts off (read Martin Lewis). I would:
Pay off mortgage
If anything left load my pension
Have a holiday of a lifetime
Get new cars
Umm...
Probably wouldn't be able to do all that with £250K, sadly

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