Paying off mortgage

[Muddle2000]

We have a small mortgage. If we pay it off what do we then do with the money?

I don't quite understand your question - if you pay of your mortgage you'll be using capital you have now so our available pot of money goes down. Or are you saying that when you've paid off the mortgage and the monthly payments stop, what would you do with the extra £ per month? Because that would depend how much it is. That accountant in me says put it in your pensions fund!

we paid off the mortgage on our main home several years ago. It can put you in a really good position.
We saved and we were able to buy a small property to let out, mortgage free.
then we moved to a much bigger house so now we have a small mortgage again!
we could just pay it off with savings but don't want to compromise on holidays and fun stuff .
we save for the future anyway and mortgage will be paid off well before we retire.
What are your priorities? saving? pension? fun? home improvements?

Lots you could do with it... :)

Loose cars and fast women

You can do anything you like with the money you used to spend on the mortgage. Sensible to pay off any debts first if you have them but then the world's your oyster. Invest, speculate, spend, stick it under the mattress... Depends a lot on what stage of life you're at really and what you want for the future. I had a very small mortgage which I could have paid off in the next year or two but instead chose to take advantage of the low LTV and low interest rates, borrow more and do some serious improvements to the house. Result... lovely home now worth considerably more than last year. :)

Got any children that might go to college one day? Got a pension? Any unrealised ambitions?

Thanx for your responses Yes, home improvements is on reflexion something we need to do The Pension thing is good though we are in our fifties so I think it may be a bit late (we do have pensions) The problem these days is that cash in the bank gains no intersest

It is 30 k by the way so quite alot

Low returns on bank deposits mean it's worth looking for something more creative once you've taken advantage of your Cash ISA allowance (assuming you've got those). In my case the home improvements ROCI would be 100% if I sold up tomorrow... so that was a no-brainer. Have you thought about talking to an independent financial adviser?

The 30k - where is this now? In a savings account?

Sorry, I think you meant that was what was left to pay on your mortgage, is that right?

ISA allowance is now £11,000 per person per year
Pensions if you are higher rate taxpayers
or look at unusual investments - I like the idea of buying land - my own private campsite

I am putting what I used to pay on my mortgage into an ISA. Once that allowance has been used, then I may increase my pension but not until I've used up the ISA allowance.

If you like to take a risk, then you can invest in companies. For example JohnLewis has retail bonds available from time to time but your money is at risk, if the company folds you lose the lot.

By 30k, do you mean you currently pay 30k a year to your mortgage company, so will have 30k a year available to spend/invest?

pay it off, no sense in a debt when savings interest rate is so low.

I also don't understand - do you mean the money that you will in future not be using for repayments?

If you're in your 50s, depending on other circumstances, pension could be a great thing!
Speak to an IFA.
Because of your age, you wouldn't be taking a decision to lock the money away for long at all.
You get 20% tax relief on your pension contributions, up to £40K a year contribution - and you can roll over several (3 I think) previous years of £40K. I'm hazy on the details!
If you're higher rate tax payers, you can claim a further 20%.
So that's an instant boost to your pension from the 20% (you put in £80, the pension company liaises with HMRC to top it up to £100. If HRT payer, you contact HMRC to pay a further amount back to you directly.
Don't see anything else giving that return!
Your access to it is more restricted... But at 55 you'll get 25% of it back tax free, if you want. If the pension proposals from last budget got through, then next April ypu'll have more access than 25% - but will pay tax on it.
Personally I'd check with an IFA that this is right!
But then I'd stick it all in my pension, and get instant great return on it, and use it to fund a 25% tax free lump sum aged 55... and use that for the improvements. Or whatever.