Inheritance - mortgage or private school

[Confusionrains]

Have namechanged for this question as I know inheritance questions on MN are not very popular!

DH has just inherited a sum of money (£100k) from a family member. We have one baby DC and 2 mortgages (one for our main residence of about £650k outstanding and another from a rental property of £160k outstanding).

We would love to send our DC to private school in the future, and will struggle to save up enough to fund it I think.

Would it be madness to save the inheritance money to use for private school in the future, rather than put toward our (hefty) mortgages?

DH inherited a similar figure earlier this year (135k)
We have invested £100k of the money in funds with roughly 10% returns. (Adventurous fund) The main aim is to use the interest to pay private school fees. We are saving as well though. DC1 will move in yr5 (starting yr1 in September so far off yet!) and DC2 2 years later.

We chose not to pay off our mortgage as the returns we are currently getting far out weigh the interest on our mortgage. Our mortgage is only £115k though so quite low.

Thank you all - lots of food for thought. We are very fortunate to be in a position to even have either of these options.

I think we really do need to do the maths (with a help of an IFA perhaps) to work out what would be best.

I would love to see the rental property mortgage go down to £60k - would be such a good feeling!

We moved our 3DC out of private school and into the state system as we were unhappy with it, and the DC hated it. They are now thriving in our fantastic local schools.
Private schools aren't always better. It depends on the children.

Don't forget that the interest on your BTL is tax deductible (albeit at a lesser rate since the mortgage tax relief was changed this year). So you may find that even if your BTL interest rate is worse, that you're better off paying the £100k off of your mortgage, and leaving the BTL one alone. That way, you'd still get 20% tax relief (and potentially more for the next couple of years) on your interest payments. The same can't be said for your own mortgage.

Of course, there's no knowing what future changes might be implemented to BTL taxation, but for now, the interest is still tax deductible.

Thanks sally and Senua - agree that private school may not be the best option for DC when the time comes, it's absolutely not a given that private school is the answer but it would be nice to have the option if poss.