Have I f*up my finances?

[Mgup]

Rea worried that I have made a colossal financial mistake. Mum of 2 teens, full time employed and a higher rate taxpayer

My mortgaged 2 bed London maisonette is worth £300k, I had £100k in equity and took a further advance of £53k secured on my flat out with the intention to buy a property in the midlands for investment purposes so that I might be able to relocate there in the long term and rent out the flat in London or sell and support my children to buy their own home in the future

I have struggled to find a midlands house for £170k which is what I am after, based on what my broker feels I can then get further lending for while using the equity the further advance for the deposit, stamp duty and legal fees.
My initial plan had been to rent the midlands property until kids finish school but having not found anything, I wonder what my options are, shall I just give the bank back the money taken for the further advance? Keep looking for a house outside London as per my original plan or put this money into a high interest account for 5yrs?
Rea scared and unsure of what to do for the best. No partner just me and the kids

Ok will call the bank tomorrow to try to cancel the arrangement but if I am unable to withdraw from the arrangement what should I do step by step?

Have you signed the mortgage?

If you really can’t pull out can you overpay some of it back? Normally you can do up to 10%, so that’s 20k. Then you could put the rest in a high interest ISA using up your allowance.

if you can’t figure it out, seek independent financial advice.

Other options are all a risk.

It could be that stock markets soar after world events play out , or there could be a major crash.

Same with gold crypto or anything else.

Read up, pay someone to financially advise (not take a percentage fee) and look for funds with low fees

Return the money. It's risky having all your net worth tied up in illiquid assets if you need access to funds. Plus transaction fees are high so if you need to sell a property in an emergency you could end up losing money. If you have a separate emergency fund or cash savings it might be different.

This is sound advice.

Speak to a financial advisor.

I will do as well but feel I am running out of time

Keeping a safe roof over your head should be a priority. Cancel the mortgage withdrawal.

Start to save separately into a stocks and shares ISA. Choose a whole market fund. Watch your money grow tax free with better returns that in a Midlands property.

No one with sense would borrow half their equity to take a risk in a market they don’t know much about. You’re putting your home at risk.

But you're a higher rate taxpayer, so these things would need extra thinking about.

Don't do / take it and just save more money away monthly for now.

You will be able to cancel. Push them and say you took wrong advice and your home is a priority.

Someone set out above - immediately pay back 10% if allowed repayments. Invest remainder in Vanguard or Interactive Investor - they charge a flat fee. Put it into a stocks and shares ISA into a blended fund. Vanguard have 80% equity funds that give excellent returns and you have 25 years until retirement so can take the risk. Pay off the max amount until all the money is back in the mortgage.

Overpay on your own mortgage dep on the rate, and/or pay into a Cash or S&S ISA. Or into a pension. You need to make your earnings, savings & investments as tax efficient as possible.

Do you have any savings vehicles for your children?

If you have never been a landlord before then don't start now.

Most landlords are selling up including us.

It is just not worth it any more.

I would just pay the money back to the bank unless you can get more interest investing it than the mortgage rate, which I doubt you can.

I think you should rule out investments until you are confident.

Based on this the lowest risk is probably;

Step 1 - now
Look on a comparison website such as money supermarket for a cash ISA with a rate greater than your mortgage rate. Look for one that does digital opening so you can open before end of tax year (this week) be sure you note any conditions about withdrawing money and dont invest if you feel you will need this money.

Step 2 - tomorrow
Speak to your mortgage lender and see how much you can repay as an overpayment without an early repayment charge. Pay this back. Also ask them what date counts as next year from an overpayment perspective.

Step 3 - tomorrow
If you have an amount you could not repay from step 2 open the cash ISA identited in step 1 and move 20k maximum to it. If you have more than 20k then ideally do this before Friday (tax year end) and then next week move another up to 20k (next tax year).

Step 4 - next week
Any remainder (over the 40k in the ISA) put in a high rate savings account - remember you will pay 49% tax in any interest.

Step 5 - seek advice
You have now mitigated your risks and can seek advice on investments if you want. Learn plan and invest when comfortable. Bear in mind any conditions around ISA withdraws and penalties.

If you just want out then when. Your mortgage allows next overpayment without an early repayment charges then take money from ISA and repay this.