To NOT want to pay off mortgage

[Blueisthecolour1]

I have come into some inheritance and have been thinking about the best way to use it wisely. DH says we should pay off a large chunk of the mortgage, which would then leave us with a remaining £61,000 to pay. For context, we've just turned 40, and have two children, 8 and 4 yrs. We both work professional jobs, we are just about able to cover all our expenses - food/bills/mortgage etc but with the mortgage up for renewal next Nov we will expect to see a big jump in our monthly payments due to interest rate rises (we're currently on a 1% interest rate which is great - for now.)

I think, given our ages that we should invest the money in stocks and shares, as we have (hopefully) time on our hands to see things mature, and by the time the kids need a bit of help (deposits for their houses) we can be in a good position to give them a helping hand. If we pay off a chunk of the mortgage, DH will then be tempted to quit his job, whilst I will likely continue to work at the same pace - he is fed up with his job and wants to do something else, even if it means lower pay. He says we can then get the mortgage done and dusted in eight years or so as a pose to 15 - BUT my argument is this only works as a strategy if you then continue to pull in incomes that enable you to actually live a bit. If he drops his earnings at that point in time, even with my salary we'd only just about be able to cover our bills and they'd be little left for doing anything - savings for the kids/holidays/doing things as a family. So we'd just be in the same boat, with no substantial savings and no disposable income to speak of.

If we pump it into stocks and shares, we are making it work for us and we'd pay off the mortgage in 15 years anyway - at which point we'll have some money to do as we see fit with - helping kids/holidays/dropping our hours at work a bit but with some savings left over to do things. Our ages also play a factor in my mind - stocks and shares are the "long game" and we're still young enough to be able to play it and hopefully see a good return in 10/15 years time.

AIBU to think investments over paying off large chunk of the mortgage? All the research I've done suggests that you should always pay off your mortgage as a priority but surely this approach only works if you both have a decent disposable income to play with for savings/living etc. At the age of 40 I don't really want to give up work anyway, I don't think it's good for my mental health to not work and I also think DH needs to be working, although i'd support him to change jobs if this is what he feels he needs to do.

The FTSE invested in over time is solid but in the narrow world of Mumsnet where people distrust anything with a graph or an advisor , it’s “bricks and mortar, you can’t go wrong”.

so be prepared to be told YABU always, just because this is practically a property forum.

I think YANBU mainly because it’s your inheritance and your strategy is sound.

Yabu, paying off debt should be a priority. The performance of stocks and shares isn't guaranteed. What is guaranteed is that interest rates are going up. Pay off the mortgage, and once you have money to spare when you no longer have payments, then you can invest. What you are suggesting is sheer lunacy.

I agree with you for the same reasons as SavoirFlair above and also I agree that it seems as though your DH will happily stop working and let you bear the brunt!

There are tax implications to investments - you really do need some proper advice

I’d say pay off the mortgage, on the agreement your husband does continue to work- albeit potentially in a different role.

Why does it have to be all or nothing? You could use some of it to pay off a chunk of the mortgage and keep some for an emergency / rainy day.

If you pay off the mortgage with your money ensure it is written in by a lawyer that you get more out the house of the worst should happen. I would never let my DH use my inheritance to quit his job and let me cover the bills. Also we're heading in to a massive recession so now might not be a great time to invest in stocks. Wait and see what the market does for 6 months and then maybe invest.

I would personally choose to pay of the mortgage, just because that is what would make me feel most secure and happy.

However your partners response of wanting to use that as a way to quit work makes it more difficult. It’s your inheritance so do what you think is right. Maybe alongside that you (plural you) need to look at your partner changing jobs/careers so that he is not so unhappy.

So your DH is content for you to pay if the mortgage with your inheritance and for you to support him while he stops working?

Fuck that. That scenario is likely to kill any relationship in any case.

Your original instincts are sound. I would go to an IFA and talk it through with them

Have you done the figures on how much your mortgage will be with the interest rate rise? Mine is going to.literally double which is going to make life a bit shit frankly.

Happiness is my main aim in life. The thought of slogging away in a job I didn't like to pay a huge mortgage just so I could give my kids a deposit on a house in 20 years time doesn't make me happy at all.

I don’t know the answer, but we’re in a similar situation so I’m following with interest.

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I would also keep investments in your name. Technically everything is the pot of you divorce, but you can in some circumstances argue to keep inheritance separate.

Either strategy could work. Pay off the mortgage and invest on S&S with the money you would be paying to the mortgage company, or invest a lump sum.

Your main problem is your DH's attitude. Giving up work at 40 is insane.

Sounds like the question is not "should we pay off our mortgage" but rather "should I let DH leave his current job for a lower paying one?".

His attitude stinks, no matter what you decide to do with your inheritance.

So basically he wants to use your inheritance so that he can quit his job and have an easier life? Whilst you continue as before. Dressed up as being a sound financial decision.

Im not against paying off the mortgage as such, it’s often the best choice, but not if he’s just going to use it to stop working / earn a lot less with no benefit to you or the children long term.

I would speak to a financial advisor about this. No way would I be paying off a chunk of mortgage if DH then decided he couldn't be bothered working because it was lower.

We used a large redundancy payment and wiped out savings to pay ours off but it was a joint and considered decision based on employment history. For us it more than paid off.

One thing about stock and shares is that you may need it at the time there is a crash as this is what happened to me. I didn't get the returns that were expected.

I’m in a similar position except I’m a single parent. I’m going to pay off my mortgage before rates jump when I come off fixed and then start building up savings / investments with spare income.
I put some savings into a s&s managed isa and it’s performed terribly.
My premium bonds have consistently paid out this year.

You could look at at an offset mortgage so you keep savings but reduce interest on mortgage payments and your DH doesn’t get tempted to reduce his income? That would be a worry for me too that he drops income and future chances of building up savings are impacted

Paying off the mortgage is right for some people for sure. But you’re right in that wealth creation is done through investment, having assets which work for you. A house that you live in doesn’t “work” for you in the same way financial investments do.

But of course there’s risk, a lot of risk at the moment, however you have to be willing to stick it out 15/20 years. Sounds like you are though.

The point about your DH potentially giving up work just because your mortgage would be lower would really concern me. At 40 you are only half way through your earning potential - you’re right that unless you inherit a substantial amount (millions) then even considering giving up work is ridiculous.

You’d be saddled with the responsibility for any disposable income you want in the future. Sod that.

I came into some money a few years back, I did pay some into the mortgage because we had quite a large one and it brought our payments down by about a third which was helpful month to month. But I also invested in s&s and another asset alongside some basic premium bonds.

If you can’t agree what to do then do nothing for the time being. I wouldn’t do anything until your DH has resolved his job situation. Pop it into a decent saver account (or two) for a year and take proper advice

This is right.
If you were working together well as a team then I’d probably opt for using some of the ££ to pay off a chunk of the mortgage to ensure you can remortgage and not pay more when your rate ends
But this does not seem to be the case here - he’s looking at this ££ as a way to quit without apparently having a back up plan. Dos he seriously expect to quit and just live off your salary?
The stock market has always performed well over any ten year cycle so if you can invest this or most of it for the longer term it should work out well - but get some decent professional advice and make it clear to your DH that this money is not his get out opportunity.

It really isn't. But it perfectly illustrates why you should see a Chartered IFA.

As a pp has said, at a basic level laying off debts should come first, but that doesn't always include a mortgage and not if the potential income from investments outweighs the mortgage interest. Obviously it's a forecasted risk but that's how IFAs earn their money.

FWIW, I agree with pp who said it's not about what you choose to do with the money, the bigger issue if your DH's job vs happiness and where that leaves you collectively.

It sounds like your DH needs to make some decisions about his future career. If he wants to retrain, what would that look like financially and time-wise etc?

And you, what are your goals for the next 20 or so years?

How old are your children? When might they be at university hence need financial support etc?

So work out how best to use the money around the changing needs of your family, rather than making abstract financial decisions, however sound they are

It's doesn't have to be all one thing.
How much are you talking about? And is the mortgage your only debt?
I'd clear none secured debt, and make sure I had a decent cash savings amount (6 months living, plus any known upcoming big spends).
I'd get 20k in a S&S ISA in your name before April. Another 20k next tax year. You could do the same in DHs name if you wanted.
Then look at the mortgage.

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