Mid-40s, £80k ISA after starting from nothing - What to do?
Discussion
Throwaway account because I guess it is a bit embarrassing:
A bit of background (bear with me)
I came from a very working-class family. No parents with university education, no holidays abroad growing up, dad ran a small cleaning business. He was a brilliant and present dad, just not a financially savvy one.
I did well enough in school, studied civil engineering, worked abroad for a few years and earned decent money but spent most of it, found earning a wedge didnt buy me happiness. now working part time as a consultant and happy enough. I also bought my first flat right at the 2006 housing peak. To make the mortgage work, my parents suggested going interest-only, figuring the inheritance from their house would eventually clear it. Genuinely well-meant, just not great advice in hindsight, and honestly they were raised the same way so I do not blame them. I have just left it as interest-only... probably a stupid jhead in sand mistake
Where I am now:
Mid-40s, married, and finally getting my act together. Here is where things stand:
Mortgage outstanding: ~£90k, still interest-only (1% above base rate)
S&S ISA: just hit £80k (Mix of tech stocks and ETFs, contributing around £300/month. A couple of years ago my aunt passed and left my dad £30k, which we put into the ISA as a lump sum, of the £80k, probably only £10k is money I actually put in. The rest is growth.) I know this is not normal. It feels like bubble territory and I am not expecting it to last.
What people are telling me to do:
1) Sell and clear the mortgage, wipes out the £90k debt, frees up monthly cash, peace of mind
2) Sell and use it as a BTL deposit, a few friends have suggested this but it feels risky and like a headache I do not need
3) Sell and move into something lower risk, stay invested but stop gambling on tech
4) Buy the crypto dip, I am not seriously considering this
What I am actually asking:
I know I am a small fish compared to most people on here. But is paying off the mortgage just the sensible, boring right answer? Or is there something smarter I am not seeing?
Would really appreciate any honest opinions. Thanks.
A bit of background (bear with me)
I came from a very working-class family. No parents with university education, no holidays abroad growing up, dad ran a small cleaning business. He was a brilliant and present dad, just not a financially savvy one.
I did well enough in school, studied civil engineering, worked abroad for a few years and earned decent money but spent most of it, found earning a wedge didnt buy me happiness. now working part time as a consultant and happy enough. I also bought my first flat right at the 2006 housing peak. To make the mortgage work, my parents suggested going interest-only, figuring the inheritance from their house would eventually clear it. Genuinely well-meant, just not great advice in hindsight, and honestly they were raised the same way so I do not blame them. I have just left it as interest-only... probably a stupid jhead in sand mistake
Where I am now:
Mid-40s, married, and finally getting my act together. Here is where things stand:
Mortgage outstanding: ~£90k, still interest-only (1% above base rate)
S&S ISA: just hit £80k (Mix of tech stocks and ETFs, contributing around £300/month. A couple of years ago my aunt passed and left my dad £30k, which we put into the ISA as a lump sum, of the £80k, probably only £10k is money I actually put in. The rest is growth.) I know this is not normal. It feels like bubble territory and I am not expecting it to last.
What people are telling me to do:
1) Sell and clear the mortgage, wipes out the £90k debt, frees up monthly cash, peace of mind
2) Sell and use it as a BTL deposit, a few friends have suggested this but it feels risky and like a headache I do not need
3) Sell and move into something lower risk, stay invested but stop gambling on tech
4) Buy the crypto dip, I am not seriously considering this
What I am actually asking:
I know I am a small fish compared to most people on here. But is paying off the mortgage just the sensible, boring right answer? Or is there something smarter I am not seeing?
Would really appreciate any honest opinions. Thanks.
Not sure what you are embrsssez about. £80k in savings is not small.
Based on very limited info you have shared and not knowing anything abt your job outlook and approx income think abt
1. Get 6 months worth of expenses in easily available cash in cash for emergencies
2. Convert interest only to repayment and start paying it off gradually
Based on very limited info you have shared and not knowing anything abt your job outlook and approx income think abt
1. Get 6 months worth of expenses in easily available cash in cash for emergencies
2. Convert interest only to repayment and start paying it off gradually
Cashclueless said:
What people are telling me to do:
1) Sell and clear the mortgage, wipes out the £90k debt, frees up monthly cash, peace of mind
Yes, perfectly viable. You can get back to ISA when you have cash available.1) Sell and clear the mortgage, wipes out the £90k debt, frees up monthly cash, peace of mind
Cashclueless said:
2) Sell and use it as a BTL deposit, a few friends have suggested this but it feels risky and like a headache I do not need
Only if you're insane. (Happy to spell out more detail if you wish.)Cashclueless said:
3) Sell and move into something lower risk, stay invested but stop gambling on tech
In your situation I would keep the risk "on".Cashclueless said:
4) Buy the crypto dip, I am not seriously considering this
Only if you're insane. (That's just my personal opinion.)In summary, and at your age, if it ain't broke don't fix it. Just pay down the mortgage debt if you feel like it.
Cashclueless said:
Throwaway account because I guess it is a bit embarrassing:
Would really appreciate any honest opinions. Thanks.
You haven’t really said what you want or what is bothering you. I guess the fact that the mortgage is IO? In which case, coming up with a plan to reduce it seems to be the way forward. £90k is not a huge mortgage amount, so although you could possibly lower the interest rate by remortgaging, it’s not going to save you that much. Would really appreciate any honest opinions. Thanks.
My suggestion would be using a mortgage calculator to figure out how much it would cost you per month to pay it off over, say, 10 years (set the interest rate to 1% higher than currently to give some buffer). You might be surprised at how little extra monthly it would cost. Then try and stick to that (at least) assuming you have flexibility to overpay.
Or you could figure out a monthly amount that is comfortable, work out how big the mortgage could be if it was to be paid off in 10 years, and make a lump sum payment to get it down to that now.
I think that simply seeing the balance decrease, even though it will be slowly at first, may help!
You don’t say whether you have excess income that you can save, but I’d be looking at emergency fund, workplace pension (if you are a 40% taxpayer), and then split the rest between mortgage and S&S isa, in that order.
I wouldn’t pay a big chunk off the mortgage yet until you have a readily available emergency fund. (You can use something like a limited access cash isa for this)
I can't tell you what to do but I can suggest that you imagine what you would do if things started going pear-shaped.
I was faced with the same decision (mortgage = ISA value) around 20 years ago and decided to stay invested because the gains had been great. Then the credit crunch happened and over 30% was wiped off the share value, my cash savings were locked up in an Icelandic bank and to top it all off my job started looking precarious. This coincided with becoming a father.
Luckily I kept my job so I never became a forced seller of those shares. For the next 6 years or so we focussed on overpaying the mortgage and didn't invest any more money for over 6 years.
Looking back I'm glad I stayed invested because the gains since then have been fantastic but it was a nerve-wracking experience and it things could have turned out very different.
I was faced with the same decision (mortgage = ISA value) around 20 years ago and decided to stay invested because the gains had been great. Then the credit crunch happened and over 30% was wiped off the share value, my cash savings were locked up in an Icelandic bank and to top it all off my job started looking precarious. This coincided with becoming a father.
Luckily I kept my job so I never became a forced seller of those shares. For the next 6 years or so we focussed on overpaying the mortgage and didn't invest any more money for over 6 years.
Looking back I'm glad I stayed invested because the gains since then have been fantastic but it was a nerve-wracking experience and it things could have turned out very different.
Personally, keep dripping money into the ISA and keep it invested. You haven't said what your retirement plans are, but personally if I was in your position with such a small mortgage, I'd 100% be going as ISA heavy as possible, pick a fund that's as focused or spread as befits your appetite for risk and just keep plugging away at it for 10 years.
Let inflation erode your mortgage, and get as much of your money as you can afford wrapped up in an ISA and earning you tax free money. Use the bank's money to fund your investments.
Obviously that depends on your appetite for risk, whether you have some safety net cash available, whether you expect to continue working and have job security, whether you're in good health, all sorts of things, whether having paid off the mortgage will make you feel enormously happy.
Typical calculations on this sort of thing, starting with 80k, contributing 300 a month, asusming 7% return (if you're in tech you'll be laughing at this number currently
) then in 10 years you'll potentially have over £200,000 in your ISA.
If you sell the 80k, pay off your mortgage, and then continue contributing 300 a month, plus whatever your mortgage interest payment is, let's assume another 300 a month on 90k, you'd end up with just under 100k in your ISA.
Seems like it's quite close, but the way 200k will be growing in 10 years vs 100k is significant
After 15 years you're at 180k (continuing the 600 contributions), vs 310k (continuing the 300 contributions)
20 years it's 295k vs 457k so you can see how it starts to separate out even if you double your contributions after selling the 80k...
I think to be level pegging after 15 years, you'd have to contribute 750 a month after clearing the mortgage, else you'd still be 90k+ ahead in the ISA, which you could then feasibly sell whenever you wanted in order to clear the mortgage off, but in the meantime that capital is earning you money.
Oh yeah, I'd also second the general notion of avoid BTL like the plague. In fact, do you want to buy my 2? Getting rid of them currently
Writing was in the wall 5 years ago and I was too lazy to get on with it
Let inflation erode your mortgage, and get as much of your money as you can afford wrapped up in an ISA and earning you tax free money. Use the bank's money to fund your investments.
Obviously that depends on your appetite for risk, whether you have some safety net cash available, whether you expect to continue working and have job security, whether you're in good health, all sorts of things, whether having paid off the mortgage will make you feel enormously happy.
Typical calculations on this sort of thing, starting with 80k, contributing 300 a month, asusming 7% return (if you're in tech you'll be laughing at this number currently
) then in 10 years you'll potentially have over £200,000 in your ISA.If you sell the 80k, pay off your mortgage, and then continue contributing 300 a month, plus whatever your mortgage interest payment is, let's assume another 300 a month on 90k, you'd end up with just under 100k in your ISA.
Seems like it's quite close, but the way 200k will be growing in 10 years vs 100k is significant
After 15 years you're at 180k (continuing the 600 contributions), vs 310k (continuing the 300 contributions)
20 years it's 295k vs 457k so you can see how it starts to separate out even if you double your contributions after selling the 80k...
I think to be level pegging after 15 years, you'd have to contribute 750 a month after clearing the mortgage, else you'd still be 90k+ ahead in the ISA, which you could then feasibly sell whenever you wanted in order to clear the mortgage off, but in the meantime that capital is earning you money.
Oh yeah, I'd also second the general notion of avoid BTL like the plague. In fact, do you want to buy my 2? Getting rid of them currently
Writing was in the wall 5 years ago and I was too lazy to get on with it
Edited by SturdyHSV on Monday 11th May 10:24
Cashclueless said:
What people are telling me to do:
1) Sell and clear the mortgage, wipes out the £90k debt, frees up monthly cash, peace of mind
2) Sell and use it as a BTL deposit, a few friends have suggested this but it feels risky and like a headache I do not need
3) Sell and move into something lower risk, stay invested but stop gambling on tech
4) Buy the crypto dip, I am not seriously considering this
What I am actually asking:
I know I am a small fish compared to most people on here. But is paying off the mortgage just the sensible, boring right answer? Or is there something smarter I am not seeing?
Would really appreciate any honest opinions. Thanks.
Personally speaking, ignore 2) and 4) instantly.1) Sell and clear the mortgage, wipes out the £90k debt, frees up monthly cash, peace of mind
2) Sell and use it as a BTL deposit, a few friends have suggested this but it feels risky and like a headache I do not need
3) Sell and move into something lower risk, stay invested but stop gambling on tech
4) Buy the crypto dip, I am not seriously considering this
What I am actually asking:
I know I am a small fish compared to most people on here. But is paying off the mortgage just the sensible, boring right answer? Or is there something smarter I am not seeing?
Would really appreciate any honest opinions. Thanks.
3) , you could crystallise the profit ,half the profit or indeed reduce the holding in Tech to anything you are more comfortable with as a percentage of the total and then simply reinvest into something perhaps a little more rounded or general.
1) You could presumably also clear the mortgage without selling and then with the mg payments saved invest those into as drips into whatever funds you feel like.
130R said:
Olivera said:
Completely forget 2 and 4.
Yes, these are terrible suggestions.Either 1 or 3. For 3 I would still stay fully invested in stocks (you can just change the fund you are invested in).
Edited by 130R on Sunday 10th May 21:11
I'm a landlord. Getting into BTL now makes no sense at all unless it has a significant yield. You will make more money in a cash ISA.
Crypto? Might as well go to a casino!
My 2p worth.
Once you relinquish the ISA theres no going back, you've lost that tax free wrapper and "only" have the 20k PA allowance going forward. I did similar to make a pension contribution some years ago and used about two years ISA allowance up. I'm still not sure it was the right choice.
The funds are always there if you choose to clear the mortgage.
As regards the risk element that is something only you can judge. You could shift in to something less focussed. You need to compare the interest rate to likely returns.
Saying all that I personally was focussed on clearing my mortgage liability before starting any significant investing. In hindsight the returns would have been better if I had run higher risk and invested first, paid of mortgage last but there is a degree of comfort to being mortgage free.
Once you relinquish the ISA theres no going back, you've lost that tax free wrapper and "only" have the 20k PA allowance going forward. I did similar to make a pension contribution some years ago and used about two years ISA allowance up. I'm still not sure it was the right choice.
The funds are always there if you choose to clear the mortgage.
As regards the risk element that is something only you can judge. You could shift in to something less focussed. You need to compare the interest rate to likely returns.
Saying all that I personally was focussed on clearing my mortgage liability before starting any significant investing. In hindsight the returns would have been better if I had run higher risk and invested first, paid of mortgage last but there is a degree of comfort to being mortgage free.
I agree with the above - I don't think paying off the mortgage is worthwhile. You're only in your 40s and your mortgage is really small. I am 42 and my mortgage is about £330k.
As stated, once you withdraw teh money, those tax free benefits are gone and the investment capital as gone. The compounding interest is entirely weakened/gone.
You could move that £80k into somethingl ike the Vanguard Global All Cap index and proabbly make 7-10% per year reliably. So £8k per year building year-on-year, rather than paying off a very small mortgage.
As stated, once you withdraw teh money, those tax free benefits are gone and the investment capital as gone. The compounding interest is entirely weakened/gone.
You could move that £80k into somethingl ike the Vanguard Global All Cap index and proabbly make 7-10% per year reliably. So £8k per year building year-on-year, rather than paying off a very small mortgage.
It sounds like it’s only 2 years of ISA and lucky gains through exploding tech stocks. Not like it’s 10 years of ISA allowances he’ll lose - if that changes the view somewhat.
That said, I left my ISA’s untouched when I bought my house as there was 7 years of our dual allowances and corresponding growth that I couldn’t face giving away.
That said, I left my ISA’s untouched when I bought my house as there was 7 years of our dual allowances and corresponding growth that I couldn’t face giving away.
Thank you for all the replies, doing a big multi quote as its a new account i get one post a day or something like that i have not been able to reply until now.
1: i do have about 8.5k in premium bonds which are doing diddly squat for me, but i like that as a buffer for any significant emergency bills that come in.
2: thats a good idea, we have toyed with the idea of moving from our apartment to a house, we don't have kids, and she would like a garden. but the move will cause a new mortgage need, so not sure i want to remortgage then sods law being what it is we will see something she likes and moving will then be a want again.
I work self employed as a consultant, having done so for only 1 year, finding my feet. So yes I need to get into a position with a pension plan soon as.
Maybe I should just look to remortgage, and see what the repayments are like, I am on about 600/month, so maybe my percentage isnt great, I need to dig out my last statement.
You make a very good point about keeping the money in the ISA, and adding to it. I guess the fear here for me is that as already said, my stocks are probably risky and look to be in an AI bubble, an all world fund maybe with a small portion in a medium risk etf would help me sleep better at night.
Sorry to hear your BTL isnt going the way you would like have liked.
To perhaps help more with my financial situation, I have been self employed for a little over a year now, working part time, I have this transition has helped me massively and we are both comfortable with less incomve but more freedom to do things together we want to do. I try to ensure I invoice £4k/month, and from that I draw £2500 for us to live on / pay bills... and I put £300 into this isa as stated.
Thanks again for eveyone who has responded the replies have been kind despite me being a bit stunted in forward planning / money management.
Thank you again
xyz123 said:
Not sure what you are embrsssez about. £80k in savings is not small.
Based on very limited info you have shared and not knowing anything abt your job outlook and approx income think abt
1. Get 6 months worth of expenses in easily available cash in cash for emergencies
2. Convert interest only to repayment and start paying it off gradually
i realise my savings are fortuitous due to the mad rush in tech stocks. and i am nervous it could easily come crashing down for any reason. the orange man across the pond is a unpredictable guy and what he says seems to direct this market we are in.Based on very limited info you have shared and not knowing anything abt your job outlook and approx income think abt
1. Get 6 months worth of expenses in easily available cash in cash for emergencies
2. Convert interest only to repayment and start paying it off gradually
1: i do have about 8.5k in premium bonds which are doing diddly squat for me, but i like that as a buffer for any significant emergency bills that come in.
2: thats a good idea, we have toyed with the idea of moving from our apartment to a house, we don't have kids, and she would like a garden. but the move will cause a new mortgage need, so not sure i want to remortgage then sods law being what it is we will see something she likes and moving will then be a want again.
Blue_star said:
How is your pension looking? Are you higher rate tax payer? How much is market value of flat?
How did you put£30k in isa, did you split over 2 years?
I think it was actually 20k in the inheritance, and then I have added about 10k, over 2 years yes.How did you put£30k in isa, did you split over 2 years?
Edited by Blue_star on Sunday 10th May 21:06
I work self employed as a consultant, having done so for only 1 year, finding my feet. So yes I need to get into a position with a pension plan soon as.
onetwothreefour said:
You haven t really said what you want or what is bothering you. I guess the fact that the mortgage is IO? In which case, coming up with a plan to reduce it seems to be the way forward. £90k is not a huge mortgage amount, so although you could possibly lower the interest rate by remortgaging, it s not going to save you that much.
My suggestion would be using a mortgage calculator to figure out how much it would cost you per month to pay it off over, say, 10 years (set the interest rate to 1% higher than currently to give some buffer). You might be surprised at how little extra monthly it would cost. Then try and stick to that (at least) assuming you have flexibility to overpay.
Or you could figure out a monthly amount that is comfortable, work out how big the mortgage could be if it was to be paid off in 10 years, and make a lump sum payment to get it down to that now.
I think that simply seeing the balance decrease, even though it will be slowly at first, may help!
You don t say whether you have excess income that you can save, but I d be looking at emergency fund, workplace pension (if you are a 40% taxpayer), and then split the rest between mortgage and S&S isa, in that order.
I wouldn t pay a big chunk off the mortgage yet until you have a readily available emergency fund. (You can use something like a limited access cash isa for this)
I guess what is bothering me is yes, my ISA has boomed due to having a fairly risk forward ETC (XLKQ) along with some tech stocks I put into a T212 'Mortgage attack' self made 'pie' (mainly googl, mu, amd, nvda, sgln, amz, asml, meta, uber, sofi).... and I realise my eggs are in one basket that could be dropped hard. Also, I am cognizant that my mortgaeg is IO which is dumb financially... and I have head in my sanded that for years, hence embarrassment.My suggestion would be using a mortgage calculator to figure out how much it would cost you per month to pay it off over, say, 10 years (set the interest rate to 1% higher than currently to give some buffer). You might be surprised at how little extra monthly it would cost. Then try and stick to that (at least) assuming you have flexibility to overpay.
Or you could figure out a monthly amount that is comfortable, work out how big the mortgage could be if it was to be paid off in 10 years, and make a lump sum payment to get it down to that now.
I think that simply seeing the balance decrease, even though it will be slowly at first, may help!
You don t say whether you have excess income that you can save, but I d be looking at emergency fund, workplace pension (if you are a 40% taxpayer), and then split the rest between mortgage and S&S isa, in that order.
I wouldn t pay a big chunk off the mortgage yet until you have a readily available emergency fund. (You can use something like a limited access cash isa for this)
Maybe I should just look to remortgage, and see what the repayments are like, I am on about 600/month, so maybe my percentage isnt great, I need to dig out my last statement.
SturdyHSV said:
Personally, keep dripping money into the ISA and keep it invested. You haven't said what your retirement plans are, but personally if I was in your position with such a small mortgage, I'd 100% be going as ISA heavy as possible, pick a fund that's as focused or spread as befits your appetite for risk and just keep plugging away at it for 10 years.
Let inflation erode your mortgage, and get as much of your money as you can afford wrapped up in an ISA and earning you tax free money. Use the bank's money to fund your investments.
Obviously that depends on your appetite for risk, whether you have some safety net cash available, whether you expect to continue working and have job security, whether you're in good health, all sorts of things, whether having paid off the mortgage will make you feel enormously happy.
Typical calculations on this sort of thing, starting with 80k, contributing 300 a month, asusming 7% return (if you're in tech you'll be laughing at this number currently) then in 10 years you'll potentially have over £200,000 in your ISA.
If you sell the 80k, pay off your mortgage, and then continue contributing 300 a month, plus whatever your mortgage interest payment is, let's assume another 300 a month on 90k, you'd end up with just under 100k in your ISA.
Seems like it's quite close, but the way 200k will be growing in 10 years vs 100k is significant
After 15 years you're at 180k (continuing the 600 contributions), vs 310k (continuing the 300 contributions)
20 years it's 295k vs 457k so you can see how it starts to separate out even if you double your contributions after selling the 80k...
I think to be level pegging after 15 years, you'd have to contribute 750 a month after clearing the mortgage, else you'd still be 90k+ ahead in the ISA, which you could then feasibly sell whenever you wanted in order to clear the mortgage off, but in the meantime that capital is earning you money.
Oh yeah, I'd also second the general notion of avoid BTL like the plague. In fact, do you want to buy my 2? Getting rid of them currently
Writing was in the wall 5 years ago and I was too lazy to get on with it
Thanks for the post this would have taken you time and I appreciate that (this goes for eveyone who replied too) Let inflation erode your mortgage, and get as much of your money as you can afford wrapped up in an ISA and earning you tax free money. Use the bank's money to fund your investments.
Obviously that depends on your appetite for risk, whether you have some safety net cash available, whether you expect to continue working and have job security, whether you're in good health, all sorts of things, whether having paid off the mortgage will make you feel enormously happy.
Typical calculations on this sort of thing, starting with 80k, contributing 300 a month, asusming 7% return (if you're in tech you'll be laughing at this number currently
) then in 10 years you'll potentially have over £200,000 in your ISA.If you sell the 80k, pay off your mortgage, and then continue contributing 300 a month, plus whatever your mortgage interest payment is, let's assume another 300 a month on 90k, you'd end up with just under 100k in your ISA.
Seems like it's quite close, but the way 200k will be growing in 10 years vs 100k is significant
After 15 years you're at 180k (continuing the 600 contributions), vs 310k (continuing the 300 contributions)
20 years it's 295k vs 457k so you can see how it starts to separate out even if you double your contributions after selling the 80k...
I think to be level pegging after 15 years, you'd have to contribute 750 a month after clearing the mortgage, else you'd still be 90k+ ahead in the ISA, which you could then feasibly sell whenever you wanted in order to clear the mortgage off, but in the meantime that capital is earning you money.
Oh yeah, I'd also second the general notion of avoid BTL like the plague. In fact, do you want to buy my 2? Getting rid of them currently
Writing was in the wall 5 years ago and I was too lazy to get on with it
Edited by SturdyHSV on Monday 11th May 10:24
You make a very good point about keeping the money in the ISA, and adding to it. I guess the fear here for me is that as already said, my stocks are probably risky and look to be in an AI bubble, an all world fund maybe with a small portion in a medium risk etf would help me sleep better at night.
Sorry to hear your BTL isnt going the way you would like have liked.
Rodintee said:
My 2p worth.
Once you relinquish the ISA theres no going back, you've lost that tax free wrapper and "only" have the 20k PA allowance going forward. I did similar to make a pension contribution some years ago and used about two years ISA allowance up. I'm still not sure it was the right choice.
The funds are always there if you choose to clear the mortgage.
As regards the risk element that is something only you can judge. You could shift in to something less focussed. You need to compare the interest rate to likely returns.
Saying all that I personally was focussed on clearing my mortgage liability before starting any significant investing. In hindsight the returns would have been better if I had run higher risk and invested first, paid of mortgage last but there is a degree of comfort to being mortgage free.
I guess with my mortgage, my property is now worth circa 175k, and my mortgage is 80k at the end of the period (in 5 years) and I think 87k at present. This money will be used for a) paying off the mortgage, or b) going towards a deposit when I sell this place if we find something that fits her requirements... which in the year we have been looking we have seem one house only that she liked. Once you relinquish the ISA theres no going back, you've lost that tax free wrapper and "only" have the 20k PA allowance going forward. I did similar to make a pension contribution some years ago and used about two years ISA allowance up. I'm still not sure it was the right choice.
The funds are always there if you choose to clear the mortgage.
As regards the risk element that is something only you can judge. You could shift in to something less focussed. You need to compare the interest rate to likely returns.
Saying all that I personally was focussed on clearing my mortgage liability before starting any significant investing. In hindsight the returns would have been better if I had run higher risk and invested first, paid of mortgage last but there is a degree of comfort to being mortgage free.
redrabbit29 said:
I agree with the above - I don't think paying off the mortgage is worthwhile. You're only in your 40s and your mortgage is really small. I am 42 and my mortgage is about £330k.
As stated, once you withdraw teh money, those tax free benefits are gone and the investment capital as gone. The compounding interest is entirely weakened/gone.
You could move that £80k into somethingl ike the Vanguard Global All Cap index and proabbly make 7-10% per year reliably. So £8k per year building year-on-year, rather than paying off a very small mortgage.
I guess for everyone its how they view the debt we have, I realise mortgage is never viewed as a 'debt'... currently I don't have any credit card debt, the only debt I have is a £300/month loan for a car. As stated, once you withdraw teh money, those tax free benefits are gone and the investment capital as gone. The compounding interest is entirely weakened/gone.
You could move that £80k into somethingl ike the Vanguard Global All Cap index and proabbly make 7-10% per year reliably. So £8k per year building year-on-year, rather than paying off a very small mortgage.
To perhaps help more with my financial situation, I have been self employed for a little over a year now, working part time, I have this transition has helped me massively and we are both comfortable with less incomve but more freedom to do things together we want to do. I try to ensure I invoice £4k/month, and from that I draw £2500 for us to live on / pay bills... and I put £300 into this isa as stated.
Thanks again for eveyone who has responded the replies have been kind despite me being a bit stunted in forward planning / money management.
Thank you again
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