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What would you do with 50k

44 replies

Safari234 · 22/09/2022 21:03

Would you overpay mortgage to bring down your monthly payments or invest money?

Thank you

OP posts:
mewkins · 22/09/2022 21:05

I'd pay the mortgage.

TooMuchToDoTooLittleInclination · 22/09/2022 21:08

Expends on the interest rate if the mortgage & if you're looking at moving & maybe porting the mortgage.

I have a bit of money I'd like to pay off my mortgage, but I'm looking at where else to put it for now as I'm looking to move and so it's silly to pay it off my mortgage (lower fix) to be able to port less & borrow more at a higher rate.

LadyMonicaBaddingham · 22/09/2022 21:08

That would pay off a huge chunk of the mortgage, so it would be a no brainer for me. I confess that I'd be tempted to keep a couple of grand back for a holiday though 😳

TooMuchToDoTooLittleInclination · 22/09/2022 21:08

Expends?? Bloody phone !

DEPENDS

ProlificInProfanity · 22/09/2022 21:10

Mortgage.

Radiatorvalves · 22/09/2022 21:10

Mortgage (you might be limited to paying off 10% a year), a bit in savings and some for a nice holiday. No point saving it with inflation as it is.

Caroffee · 22/09/2022 21:10

Over-pay the mortgage, particularly atm with interest rates rising.

TheClitterati · 22/09/2022 21:11

£30k of mortgage, £10k into pension and invest £10k in a tracker fund.

ConkerBonkers · 22/09/2022 21:11

I would pay the amount of overpayment I could on the mortgage for a few years, and also get some solar. Once the mortgage is paid off early I would look at banking those payments with a view to potentially investing them in a little buy to let, or maybe private pension.

NAME3CHANGE · 22/09/2022 21:13

Omg I would first of all get a lovely cheesy pizza 🍕 and fill tummy’s

then I would have a proper think and pay off the mortgage, making sure I had a little bit of easy access cash in case of emergency

Fevertree · 22/09/2022 21:14

5k to each of my kids (2) to boost their savings. 10k for a couple of nice holidays. The rest either to help us move or towards an extension

Safari234 · 22/09/2022 21:24

Thanks should provide more details.

I realise we are in a privaledge position but was from inheritance and have more than 50k but In our 30s, planning for DC2 so have kept some money to make maternity leave year more comfortable, DC1 has some savings and will continue to save for them.

We still have 30 odd years left on mortgage but only 2 left in our fix rate period I think something like 1.42%. We could pay 10% each year extra without a charge.

I get confused as some people say oh don't over pay mortgage as interest rates are so low anyway. But then so are the savings rates?

Someone suggested eventually a Buy to let property with interest only mortgage with all of the money (and not to keep any behind for mat leave yeah etc) but I don't want the stress nor adding to the difficult property market as it stands..

But currently it's just sitting in our account witb other savings so feel like we should do something better with it.

Thank you

OP posts:
Whycanineverever · 22/09/2022 21:25

I sometimes lie in bed and dream about what I would do with a lump of cash and it's usually 50-k

I would overpay mortgage by about 20k which would be the max for this year I am allowed.

I would out maybe £7k to an amazing holiday I have planned. Approx £10k I would put in long term savings and the rest I would put in more accessible savings but up my pension contributions from my salary each month and then drip feed this money into my current account to compensate for the drop.

BadGranny · 22/09/2022 21:26

I rent my house, and have no intention of buying. I’d treat myself to a gold Rolex and put the rest in a savings account for a rainy day.

I own nothing of value - very little, cheap jewellery, buy clothes from charity shops and eBay, and run a small second-hand car. Just once in my life I’d like to have just one thing that is ridiculously and unnecessarily extravagant.

What would you do with 50k
Dripdropper · 22/09/2022 21:32

in a similar situation and was told to either lock the money away in an investment for minimum five years or pay down the mortgage as much as you can (10% per year usually).

i think I’m going to do 10% of mortgage now, and then ASAP again when I can do it without penalty. I need to check if the next mortgage “year” starts on the anniversary of when I took the mortgage out not 12 months from first 10% overpayment.

i must also put some into a pension. Wasn’t sure what kind of sum that should be and am interested to see some consistency in 10k being suggested here.

Theprimeofmissmulroney · 22/09/2022 21:44

Pay off a bit of the mortgage

FrownedUpon · 22/09/2022 21:48

I’d get my mortgage paid off. Can’t wait to get rid of it.

mac1974 · 22/09/2022 21:54

We had the same thing a couple of years ago. We decided not to pay the mortgage off as we can currently afford the repayments and the likelihood of us getting this type of cash again is slim.
We are probably going to use about £5k for some work on the house soon but the rest is in investments not to be touched for as long as possible.
We did have it in savings but it was too easy to access.

nannynick · 22/09/2022 21:55

Paying some off mortgage is not bad in my view, it reduces the debt, so changes the loan to value, so means you may get more options at the next remortgage point.

Cash flow is important, especially as you have mentioned having DC2. Keep enough of the money liquid. If you currently have an emergency fund of 6 months of expenses, you may want to bump that up, so your cushion is bigger should anything unexpected happen.
Being on maternity leave you are likely going to have a drop in income, but an increase in expenses - cost of living, more time at home, baby related things.

Some to pension now whilst you are working is a good idea, so you get the benefit of tax relief.

It is hard to say that doing one thing is better than doing another thing... often it is good to do some of all things. The exclusion to that would be if you had any consumer debt (so debt which is not mortgage debt on your home). If there is any consumer debt, pay that off.

Chicheguevara · 22/09/2022 22:11

I am a big believer in paying off the mortgage, or any debt for that matter. Mostly as the interest that you pay is much higher than the interest that you get on savings, and I really dislike paying out interest, which to me is just giving money away. I too might keep a couple of thousand back for a holiday or to stash away somewhere for a rainy day.

jesusjoan · 22/09/2022 22:16

If your overpayments to the mortgage would make a difference to the LTV when you come to the end of your fix then it might be a good idea to do that.

Maybe split between the mortgage and put the rest in an S&S ISA or SIPP (if you've maxed out your workplace contributions)?

lurchermummy · 22/09/2022 22:21

I'd buy a house and rent it out for income and future capital growth.

Kite22 · 22/09/2022 22:32

Personally I'd retire, as you are asking Grin

But at your stage of life, paying down the mortgage is probably what I'd have done.
I mean, there are so many other factors to consider - your income, your job security, your other debts, what needs doing on the house or if you are going to need to renew the car soon and so on and so on, but it is lovely to see your mortgage come right down.

BarbaraofSeville · 23/09/2022 05:32

Chicheguevara · 22/09/2022 22:11

I am a big believer in paying off the mortgage, or any debt for that matter. Mostly as the interest that you pay is much higher than the interest that you get on savings, and I really dislike paying out interest, which to me is just giving money away. I too might keep a couple of thousand back for a holiday or to stash away somewhere for a rainy day.

But the OPs mortgage rate is currently 1.42%. She can get more interest in an interest access savings account. Or put it in a fixed savings product for a little more, then possibly apply it to the mortgage at the end of the fixed rate period.

OP, in your situation, the only reason to overpay your mortgage would be to get a better LTV on remortgaging, although I'd do that at the end of your current deal, not now, or if you'd otherwise spend the money on shite and end up with a bigger mortgage and no savings. Or possibly if there's a chance you'd have to claim universal credit, as in that case, you'd be expected to live on the money until it reduces to under £16k. Otherwise, when people say 'no point overpaying, the interest rate is so low' they are right.

As for what I'd do with the money, in your circumstances, I'd think about when I might need/want to use it. If some years away, invest some or all of it in an ISA or pension. But not if there's a chance you might want to upsize in the short to medium term.

In that case, you need to save, not invest, and then I'd be looking at a fixed rate savings account, or even premium bonds, you should get a similar payout to your mortgage interest rate, although this is a gamble.

The other thing I'd think about would be whether it's worth using some of the money on energy saving measures that might otherwise be unaffordable, eg better windows, boiler, insulation, solar panels, or even an electric car.

Ladyof2022 · 23/09/2022 05:38

This actually happened to me except it was 70k.

Consecutive renant of a little flat I owned and let gave me so much grief that I sold it and I used the money to pay off the mortgage on the house I live in, just 7 years into a 25-year term. I've never regretted it.