To NOT want to pay off mortgage

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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.

If it wasn’t for your unreliable husband, I’d say pay off the mortgage. Shares don’t seem that reliable- maybe invest a small amount to see how they go initially?

I’d be looking at getting a buy to let if I were you, with a 25 percent, interest only mortgage. (And turn yourself into a demonised landlord!)

How will you manage in November when your interest rate goes up if you are only just coping now?

Is your husband genuinely struggling or inclined to be lazy? Wanting to reduce pressure and to leave something you hate is not unreasonable but I'm guessing there might be a back story?

If this were posted the other way round from a woman not coping with her job and an opportunity to reduce hours/responsibility and the OH wanted to invest in something non specified, they'd have their arse handed to them on a plate.

Only you know your husband. I'd be inclined to do a split option. Hard without knowing figures involved but clear enough that your outgoings don't go up (otherwise the inheritance will just be dipped into to cover everyday expenses) and leave some to invest.

I think it’s fine for DH to want to change jobs but he needs to find something that still pays the bills.

I don’t know how much you’ve got but I personally would try and split the money into 3:

1/3 for the mortgage.
1/3 for stocks and shares.
1/3 to enjoy now and have a holiday or something.

Why is it ‘insanity’? For a £300k mortgage at 1% over 15 years you’d pay £23k in interest. If you saved the mortgage payments (approx £1700 a month) @2% interest over 15 years in a basic savings account you’d save just over £350k, so in real terms you’d be £73k better off paying it off now and saving than vice versa.

I would pay off a chunk of the mortgage only on the basis that your husband continues with his job or finds another with equal salary. Stocks and shares are not 💯

I would pay off the mortgage but take financial advise regarding the fact it's your inheritance. If sounds like your husband is unhappy and you could agree to this on the basis it gives him an opportunity to look for a new job without the financial pressure but that he needs to find one at a similar income level or you do not benefit from it financially. Personally I would rather ha e more money when my kids are you get to take them on holidays and experience things as a family than have the money in 15 years when they are on their way into adulthood. I can downsize myself then if needed and give them money for a deposit.

I'd personally pay off the mortgage because the security that brings would mean so much to me. But obviously you need proper advice. Nobody can predict what mortgage rates will be in a year's time when you come to remortgage, nor where the stock market will be, so whatever strategy you go for will carry some risk.

Also, how unhappy is DH in his job? If he's been miserable for years but stuck because of a large mortgage I think it's important to take his happiness into consideration. It's very easy to become depressed in those circumstances. Does he have a plan for what else he'd do?

I also think that if it were a woman posting that she was really unhappy in a high stress job and her DH wouldn't let her quit the responses would be quite different!

I presume when you are taking about paying a chunk off the mortgage you mean next November when it comes up for renewal?

I agree with @Whatevergetsyouthroughthenight 's points. I'm a similar position re having a chunk of cash (saved while interest rates are low) and needing to make a decision on what I do with that. For me, I am going to pay the mortgage off and then do less work. Not necessarily forever, but I need some time to just get my head back to normal.

But that's a decision I can make myself because I'm the only adult in the situation. Your husband can't make that decision alone but deciding that he's just got to somehow be happy with work probably isn't the answer either?

It can lead to resentment. Better you don't give him a ticket to put his feet up all day whilst you slog.

I'd definitely use a large proportion of it to pay off the mortgage. Even if you did make a decent amount in stocks and shares, you'll only be using it to pay off your high mortgage interest.

Get your mortgage down as quick as you can and then continue to save whatever you would have been paying on your mortgage payments.

I'f probably keep some aside to do something nice with, a holiday or change your car. And save some somewhere you can gain access if you need like premium bonds or a savings account

Find a way to protect your inheritance if you do decide to pay off the mortgage. Just saying.

Why would your DH want to give up work at 40, what would be his purpose in life for the next 40 years? I would split equally between SIPPs and ISAs in a vanguard world equity accumulation fund through a low cost fixed cost (not percentage fee) platform such as Halifax share dealing. Over time it should grow at above inflation and protect you if the Pound falls further over time. Calutron against investing in FTSE which hasn't really gone anywhere in the past 22 years.

Your 1% mortgage rate is amazing. Your strategy is sound OP. It would be hard not to exceed 1% if you invest and likely you will make much more than that so its a no brainer, moneywise.

This is a coincidence. I have a very similar amount of inheritance and do wants it all to go into the mortgage so it’s paid off. It’s frustrating that I won’t get to use the money for pleasure but the fact there is. O longer a mortgage is a good thing.
In your case, the key thing is that your husband appears to want to use your inheritance to give up work. This needs some careful thinking about.

I think it's sad that you have built your financial strategy around the fact that you can't trust that your DH won't effectively use your inheritance to hit cruise and kiboshing your long term security.

But - given you know the above to be true - I think you may be cornered into your plan to avoid the above, regardless of the best on-paper plan.

The issue isn't about paying off the mortgage vs investment both are good options. The issue is your dh wants to reduce his earning capacity for an easier life and you don't want this. You are foreseeing that financially you need to keep the income coming in whilst still young and your kids will have a number of expenses to come which you envisage helping out with. You need to have a serious conversation about this. It may well be sensible to do a bit of both, pay enough of the mortgage when your rate goes up to keep payments at the current amount and then invest the rest. More importantly you need to sit with him and map a bit of a future plan. How much will you set aside for kids first cars, uni expenses, first flat deposits, first house deposit, weddings etc. When do you envisage downsizing / retiring. What will your retirement incomes be etc. Maybe if he actually sees it all laid out on paper he might understand why it is a little short sited to just pay off the mortgage and reduce his earnings now.

She's said DH wouldn't stop working but would get a job he liked that that paid less well. I don't actually see anything wrong in him wanting to do that and think it's worth the conversation about what that would be and how much less income is feasible before it becomes unfair on the family as a whole. If they can afford for him to do a job he's happier doing for the last 28 years of his working life, then I don't see why he has to stick at the current one just to be matching the OP's income on principle (assuming she doesn't want a career change too, if she does that needs factoring in). Her goal of having money to help the kids out down the line has to be balanced with their quality of life (not material but day to day fulfilment) in the intervening years.

Plenty of women on here earn less than their DPs and have other kinds of satisfaction and purpose without being seen as lazy or workshy. So as long as he still wants to work and will bring in enough, albeit not as much as the job that's making him unhappy, I think it needn't be all or nothing but could happily be some combination that balances saving for the future with living for today.

The FTSE100, on average, returns 7.75%. Your interest on your mortgage, come renewal time, will not be that high. It becomes a question of maths and affordability. If you can afford the potential mortgage hike, then it is a no brainer to invest the money. While returns are never guaranteed, at an average return of 7.75% your money doubles every 10 years. However, should the increased mortgage cause financial difficulty, then consider putting some of the inheritance into it.

Inheritance is something that belongs to you. The most important take away is that you should not let your husband dictate what you do with it. Especially if it is to make his life easier whilst yours stays as it is.

Notwithstanding the husband issue, what I'd most likely do from a purely financial aspect, and also not knowing the amount of your inheritance, is;

1. leave the mortgage as is until the low rate ends
2. invest all the inheritance in safe havens a) premium bonds (expect around 3% pa) , and b) savings account (expect 3.2% return)
3. when mtge rate deal ends then pay off as much as I could after liquidating all savings and premium bonds.
4. at that time increase contributions to pensions by amount of reduced mortgage payment for evermore, and build investment in stock.markets via pensions over the long term in tax efficient manner.

Markets in 2023 are not, in my opinion, going to be much less volatile than 2022 so personally I'd stay away from that for a year especially if I had a thumping mortgage that I could trim down - I wouldn't risk my inheritance playing on the market if I needed it to reduce debt in the near future.

But it's only 1% til November. 5 year fixes are still sitting at nearly 5% currently even with a good LTV. So for me that would add nearly 40% to my mortgage payments. If they haven't dropped by next November and the OP and family are only just managing now they could be in a situation where they have stocks and shares that have gone down in value that they therefore have to leave in place so they don't crystallise the loss and a mortgage that has gone from very affordable to something that makes their lives pretty difficult.

Obviously that's night not happen, mortgage rates could drop and there might not be losses on stocks and shares, but with only 11 months of fix left it needs consideration.

I was going to split the two issues in pretty much exactly the same way. You really need to separate out the financial strategy of what to do with the money from what your husband wants to do with his future and his career. The two must be kept separate, at least at first.

I agree that in the current market situation, investing in stocks and shares, especially with no previous experience, is a recipe for disaster, even if you use an excellent advisor. Advisors aren't free, and the good ones take a large cut even though they still can't and don't guarantee against total loss let alone sky high performance. Even a low risk portfolio still has risks attached to it; in some of the worst financial disasters in history, even low risk portfolios suffered badly. Investing in stocks and shares should only be done with money you can afford to lose after all large debts have been paid. Do NOT rely on it as the sole savings vehicle for your children's future when you haven't even paid off your debts. Even solid stocks can disappear down the pan.

Not only that, but interest rates will be shooting upwards for quite some time to come. The larger your mortgage, the bigger your payments will be. If you're on 1% fixed now, your interest rates are about to go up by about 5 or 6 times that (although the repayment part of payments won't go up, the interest part will). Interest rates could easily go up to 8-10% for mortgages by the time you're renewing. Can you afford to pay 8-10% interest on your current outstanding amount?

I think you need to think a bit more about what you need to do in the short, medium and long term, and possibly get some professional advice regarding how to handle the financial strategy.

How you handle your husband's future is a different thing altogether. However, someone forced to remain in a job they resent isn't going to be happy in any environment, and they're not going to look kindly on the person forcing them to stay in the job they hate. Conversely, they need to be pulling their weight in the family and relationship including financial, household and emotional contributions otherwise you'll be the one resenting them. It's a tough one, but it can only be sorted by open and honest communication between the two of you.

Overpay the mortgage and a saving on interest. No brainer, as they say.

Stocks & shares can go down as well as up so that would be a gamble.

Simplistically I'd invest in stocks and shares. It's a good enough time to invest as markets have dropped so you'll get more units for your money .
My feeling is your OP is looking for an easy route out of work . Him going to a lower paid job will long term impact your wealth and you may not be in a position to help the kids .

Do some of both. It's wiser to pay off your mortgage. And you shouldn't delay that to deter your husband from certain actions. Instead speak to him about his ideas, put forward your own but it doesn't seem wise to take a less financially sound option in order to decide what he should do. At the same time you're the one who inherited so you have more say. Perhaps you could do some of both?

I'm in a similar situation and I won't be hesitating in paying off most of the mortgage.