If you had 30k would you spend it, save it or pay a chunk off your mortgage?

[MrsTumbletap]

Hi all, my husband has just inherited 30k from sadly losing his dad. We weren't expecting it and we now have this chunk of money we are not sure what to do with.

We still have a massive mortgage that we will be paying for another 25 years at least.

Even if we take the 30k off the mortgage it will still be nearly 180k to pay off.

We both work so go on a holiday every year, and have cars that work fine so we don't really need it for a purchase of anything.

What would you do with it? Put it in an ISA? take it off the mortgage? Take some off the mortgage but not all? Put it in a high interest current account?

Spend it on some home improvements that need doing. Extension.

I would put it towards the mortgage. There is a good calculator on money saving expert to see what you would save over the years.

Pay a lump sum off the mortgage and put the rest in savings. Even with a large mortgage, overpaying saves so much in interest in the long-term.

We would pay it off the mortgage. But it would be a much bigger percentage of my mortgage than it is of yours.

In your position I think I would put it into savings with as high interest as possible, so you've got something in reserve in case trouble hits. You never know when one of you might lose your job, get ill, etc. And that money could be a good safety net.

We’ve got a small mortgage so we’d prob split it £10k spend on house, £15k off mortgage and £5k savings. But in your situation if there’s nothing pressing that needs doing on the house I’d prob pay it off the mortgage. Although I would wonder about the prospect of ending up in negative equity and “losing” the money given the current economic uncertainty, especially if you’ve only recently bought and already have a high mortgage to service.

Assuming you've both got pension then pay a chunk of the mortgage and save the rest.

I'd definitely put it on the mortgage and reduce the term of that. You'll save loads in interest.

I ran it through the Money Saving Expert mortgage overpayment calculator:

www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

I don't know your interest rate, but calculated it on a mortgage of £210k over 25 years.

Wow! That mortgage calculator is awesome.

It seems like a no-brainer to me. Pay off mortgage.

Do you have any savings that are easily accessible for a rainy day? Does your house need any work?

I'd do £20k on the mortgage/for home improvements, £5k in easily accessible savings for an emergency if you don't already have and £5k to have a fun-holiday, nice price of jewellery to remember your Dad, frivolous house stuff (hot tub/pool table!?)

I paid off my mortgage 7 years early by paying a lump sum and regular over payments. It started by using that calculator. Being mortgage free now is an amazing feeling.

Into the mortgage. Every time.

Mortgage
Mortgage
Mortgage

25k mortgage
5k nice holiday to recover from the devastation and recovery and you need it be kind to yourself.

Yes to overpaying the mortgage, but check how much you can pay off without incurring charges and then chuck the remainder in savings.

Pay £25k off the mortgage and save the other £5k. However you need to not be in a fixed mortgage deal to do that anyway so you might need to time it right.

10% of my mortgage as that's the most I can overpay. Then I'd pay off the credit card we have, pay for a holiday and have about £5000 left for savings.

If I didn't already have, put 6 months living costs aside.

Then the rest on the mortgage.

I can imagine no scenario which would see me spending it, that would be such a waste.

Our mortgage isn't large, but we exhausted all our savings moving last year - so in our case we'd keep it to fund mat leave and childcare and provide us with a financial cushion.

In your position I'd use it on the mortgage probably, but if on a fixed rate you might be best to bank it until the fixed ends and then use it to reduce the term.

We'd put it into savings so we had a good cushion. Maybe spend a few thousand on a holiday, but the rest off for a rainy day / case of emergency.

I’d put most into paying off the mortgage and keep £5-10k for savings. Maybe spend a little on something special to remember DH father (a trip, or a special piece of furniture or something like that)

Pay it off the mortgage but keep a few thousand back if you don’t already have savings .

I would put it towards a house deposit.

Definitely pay some of the mortgage. We can only over pay 10% of the debt each year, but you could pay this years 10% and then save the rest to pay another instalment as soon as the year changed. It’s so boring paying the mortgage off but in 20 years time, when the loan is paid of early, you will be really thankful you’ve done it I’m sure.

We actually do have some home improvements to do and we do want to do maybe a big holiday next year. So thinking 15k on that. Having 5k in savings should anything go wrong - boiler, head gasket in car etc it would be nice to have a safety net. So we thought maybe pay off 10k off the mortgage.

So I rang mortgage company and no fees on overpayments. If we take 10k off our mortgage it will reduce our monthly payments by £55.

But you can just take it off without reducing the monthly payments. Then I got confused and don't know if that would be better?