What woud you do with £30k

[sunshine75]

My dad has downsized and wants to give me £30k. The frivolous part of me wants to spend it on holidays and 'stuff'. I would incur an early repayment charge at the moment if I tried to pay my mortgage off. However, the sensible part of me is thinking that I should use it as a deposit for a flat to rent out (I live in the north so could buy a decent one for 100-120K). The rent would cover the mortgage and then my daughter could have the flat in 15 years or so and would have a foot on the property ladder.

Is this a good idea or would you do something else with it?

Keep it totally untouched until you are allowed to repay part of the mortgage. You may be allowed to repay 10% a year even now on the loan. Check the terms and conditions.

I suppose the questions are

1 - would it make a difference to your day to day living to have £30k off your mortgage ?

2 - have you got enough spare day to day money to cover a second mortgage for a few months until you get a tenant ?

I think a 2nd property is a fantastic idea as long as it wouldn't be a massive issue to have a few really frugal times if it isn't renting for whatever reason.

Do something fun and invest the rest. You could probably over pay on your mortgage a bit without being charged.

If it were me I would buy a second property on a buy to let mortgage. A brilliant idea.

I would look at the mortgage terms and overpay each month the max amount you can without incurring penalty.

The rest I would put in premium bonds - ok so you do not get a guarantee of winning anything but once set up it is easy to get out.

Then keep an eye on the ISA market, once rates pick up then put max amount into CASH ISA and consider shares ISA.

Also consider your risk level, would you invest £5000 for 3 years for 6% annual return, but not have guarantee of getting it back? If so, then look at corporate bonds, such as with JohnLewis. Not sure when they will be wanting more bond holders, could be some years away now.

Investment in property perhaps but as you have a mortgage then you already have property investment, so put it into that first... Drip feeding as necessary for next few years.

Definitely put it down for a deposit! Imagine, once it is paid off you'll be able to afford a holiday every two months!