Don't know what to prioritise first

[sunshinedaises]

I have £500 a month spare to put somewhere. I currently pay 22% into my workplace pension but I only work 15 hours so it’s not a lot. I have a SIPP which I may put the odd tenner in here and there. My ds has just been diagnosed with a life limiting condition which means we need to move into a bungalow in a few years. With how much ours is worth and with equity we couldn’t afford to get the kind we want so we want to overpay the mortgage to get us in a better position, but it makes me nervous as its not accessible. I flit between prioritising mortgage overpayments and just normal savings as at least we can access that if needed. Have about 10k saved and 14K in a LISA. I have stopped payments into LISA now and I wanted to start a s&s ISA but it just feels like too many different accounts when I only have £500 to spare. What would you do, would you spread it all or on focus on one thing until that’s achieved?

How much is your mortgage rate? If it is more than you would earn in interest on savings, then it makes sense to overpay that as a priority. We are overpaying by £200 and it has made such a difference to the amount our mortgage reduces by every month.

There are some good calculators out there to show how much you will save in terms of mortgage interest. There will be a sweet spot in terms of how much you overpay compared to the benefit it gives, so that may help you decide how much of your £500 you put towards it.

Yes it’s all about interest rates provided you have access to some savings fairly easily.

Are you aware you can only use a LISA on a first property? It seems from your post that you are both already homeowners so you won't be able to access you LISA savings now until you're 60 and you take it as a pension , or if you pay the penalty to withdraw it.

However, I think if you aren't going to move home for at least 5 years you should consider withdrawing it and putting it in a S&s ISA. It is more than likely going g to increase in value far more than the penalty to withdraw it and much higher than a cash savings interest rate.
You can then put your £500 into it as well, and you won't have more account as you'll close the LISA.

There are S&S LISAs available and so there is no need to take the penalty to withdraw.

I think pp was trying to say she can't use the money from the Lisa for the next house she needs to buy without getting a penalty for withdrawal as it won't be a first home she's purchasing so the only way she could take it penalty free would be for retirement
So if she needs the money for the next house purchase she'll either need to use other savings or take the penalty hit on the lisa

1. What is the property value you want to buy?
2. What is the current value of your home and the remaining mortgage and the interest rate you are paying on it?
3. Roughly what region are you in? (So can see if house prices are rising, falling, stagnant etc)
4. Are you claiming the support you may be entitled to if your son has a life limiting illness and presumably disability (based on you needing a bungalow).
5. How old are you? Are you married? Both working? How stable is your employment?

Yes exactly that. Withdraw it now as cash and pay the penalty which is something like 6% on the cash amount, then put is a standard S&S ISA and let it grow. Then you will have a larger deposit for a new house than if you left it as cash.

If you convert a cash LISA to a S&s LISA then your choice of providers is very much more limited so you may not get such a good deal on fees, then when you withdraw it on 5 years for a house deposit you're paying 6% penalty on a much bigger amount so it will cost you more to withdraw it then.