Keep invested or pay off mortgage

[Dinoswearunderpants]

Hi all

I'm trying to figure out what's the best option. My mortgage rate expires in a few months time. It'll change from 1.49% to cheapest 5.15%.

I have some money invested currently yielding 5%. I'm trying to work out whether to cash it in to repay a chunk of my mortgage or leave it invested.

I currently pay £1,000pm in mortgage. I figured if I did repay the chunk, I'd still keep a portion back for emergency funds then that would leave a mortgage of £40k. If I kept paying £1,000pm I could be mortgage free within 4/5 years.

WWYD?

What's it invested in and what were your plans when you invested?

Stocks and shares ISA. It's various funds/stocks. I never had specific plans for the money as it's an inheritance.

If you're earning less than you'd be paying in interest for the same £ then I'd put some of it into your mortgage. I'd try and keep my payment the same in the hope of overpaying. Totally agree with keeping something in accessible savings though.

Thanks @HelloMyNameIsElderSmurf I do believe with the interest rates as they are, I'm likely paying more on my mortgage than what I gain on the investments.

I think it very much depends on your goals and attitude to risk.

Personally I am keeping on investing rather than paying off the mortgage. That's because I think that over the time horizon I'm looking at investments are likely to out perform the cost of interest (and the capital owed is eroding with inflation). That's certainly been true over the last year as the global tracker funds are up c20%. Of course they'll inevitably fall at some point too so it depends on whether you prefer the certainty of the mortgage repayment. If you've only had a gain of 5% in the last year it sounds as if you might be relatively low in equities, which might reflect your risk appetite.

PS I wouldn't keep an emergency fund in S&S - you don't want to be forced to wthdraw it at a low point in the market.

Get some proper advice, there is no right answer.
We paid off the mortgage 2 years ago (no holidays, drove bangers etc) the will never forget the feeling when the last payment was made, it felt like I could breathe deeper!
Since we have had a small holiday and upped our investments.
Knowing that if one (or both) of us lost our jobs and we would be ok for months is peace of mind that can't be described - last year my DH gave notice on his stressful job and started a new job in an adjacent sector, as the main bread winner this hadn't been an option until recently.