Overpay Mortgage more or Stocks and Shares ISA

[ItsAPhaseImGoingThrough]

Looking for opinions on what to do with spare money each month, as I can't seem to decide what to do.
We already overpay our mortgage, and have some emergency cash savings.
We have around 100 a month extra that we could put either into a S & S ISA, or overpay the mortgage more. We have a high interest rate of 5.9 percent on our mortgage, and 3 years before we can renew it at a lower rate.

I really want to try stocks and shares, but is it more sensible to get the mortgage down further.

If you can leave the money in the S+S ISA long term (10 years+) you're likely to get more than 5.9% on it. More likely to see 8 to 12% growth. So the S+S ISA makes the best financial sense.

Thanks, this is worth thinking about. I need to do some more Maths, my mortgage is quite big at the moment so just want to see it reduce more.

We chose to put money into a stocks and shares ISA, as other post said it gains more then we'd pay in interest and it has as we've been doing this over the past 5 years. Hopefully this will help pay off our mortgage a bit earlier.

Stocks and shares are always a risk though. I wouldn't touch them.

This may sound dumb, but as the mortgage is over 100,000 and I would be starting a stocks and shares ISA from scratch, would the ISA still make more money than I would save in interest on the mortgage?

Our mortgage is double that and it still works out better for us. Yes stocks can go down but generally over the long term and with a investment that is spread over the market (not single shares) it goes up.

You can pull the cash out into a cash ISA if you feel at some point the market may dip.

Look at it from a different angle - if your house was paid off, would you borrow against it again to put money into S&S?
That would also make sense in terms of maths but I don't think many people would do it.

You could try putting it in the ISA to get the higher growth and potentially then withdraw it at the end of three years and pay off a lump sum at completion.

Not a dumb question at all. Yes you'd still be better off investing, assuming a return of above the 5.9% you're paying on the mortgage

Here's a quick calculator on MSE where you can compare overpayment to investment/savings:
https://share.google/HaOmDxKmYRhCrzSbY

Also if you haven't invested before, it might be an easy way to get comfortable/experience doing it when the amount you're investing is, comparatively speaking, small. Assuming that when you pay off your mortgage you'll have £££ available every month to invest if you choose.

If you do choose to invest, pick index linked funds. Don't buy shares in single companies unless you know what you're doing!

Thanks everyone, I think I will increase my overpayment slightly and invest the rest, leaving it for 10 years.

Historically the S&P 500 has outperformed the uk property market. So the most financially sound thing to do is invest in a S&S ISA.
However, there is something psychological about seeing that mortgage figure go

It's not a question about whether an ISA will make more money than the whole mortgage but what is the effect of the amount you overpay or save.

ie, which is better? A £90k mortgage or a £100k mortgage and £10k of savings? Likely the latter over the long term.

But is there a reason why your mortgage rate is relatively high? It could be worth paying the early repayment charge to remortgage for a better deal. Moneysavingexpert.com has a calculator which will work this out for you.

If, say, you're able to remortgage now to a deal costing 4%, the interest saved over the next 3 years could be more than the ERC. But that depends on how much the ERC, your mortgage and any new product fees are along with your new rate.

You don't have a pension?

For 100 a month I’d put it against the mortgage. Stocks and shares needs long term growth to guarantee that the investment grows (recent stocks n shares have been all over the place with our government management of the economy) if you are looking to lower the mortgage in 3 years it’s easiest to repay mortgage now. Another poster mentioned your early repayment charge on the mortgage. Maybe check with a broker if you can remortgage now to lower rate. Depending on the charge it may or may not be worth doing now not in 3 years..