Pension or mortgage?

[Konstantine8364]

I appreciate I am very lucky to be in this situation. I may get a huge bonus from work from a share scheme in the next 18 months. I would end up with around 30-40k after tax. I am going to enjoy half (not for debate haha!) And do sensible stuff with the other half. I just have no idea if pension, mortgage or something else is the best idea for the sensible half. So if you had a windfall of around 15-20k what would you do with it? I am 35, own a house with a mortgage of 80k left. No dependents or debt (excluding mortgage).

YABU pension
YANBU mortgage

TBH I would whack it off the mortgage.

I assume you are already paying into a personal pension anyway? If you can bring the mortgage right down, potentially pay it off in the next ten years, then you can pile as much as possible in to the pension.

What is your mortgage rate? How long are you fixed? How much is in your pension?

I paid off my mortgage before age 40, so I like the idea of reducing mortgage.
If you find it hard to choose, then do both.

With mortgage be aware of max amount your lender will permit in overpayment without there being a penalty. I would not be paying a penalty... I would do up to that amount.
When you are made redundant, or feel the need to move on from your current job, having a small, or no mortgage at all, can really help as you do not have to find that monthly payment.

Double check how much you can take out the share save without being taxed, I know someone else who had to take half and keep half until the next tax year to avoid capital gain tax (it’s only on profit you have made not the investment I think).

I would vote half mortgage to keep it under the ERC…or upto this amount. Then some into pension and then 10k into an ISA