Some advice please

[Undertaker1968]

I have a mortgage of £60k left to pay and ive just come into some cash as ive just turned 55 and drawn down 25% of my pathetic pension pot that they have hammered for the last decade

I did this before they plundered the pension pot totally, there is always an excuse to do so isnt there......

Now the choices i can make is this I could pay half of my mortgage off basically with my savings and what ive pulled out of the pension

Do i do that wondering what is about to happen to the financial market ? Do i buy bullion perhaps ? or Do i pay as much off the mortgage as possible ?

I dont fancy crypto in honesty because i sense you have to be part of the matrix to access it, a matrix they are about to tightne up significantly to shaft people.

Im leaning towards gold and silver, but i do want rid of the mortgage

your thoughts please as intrest rates rise and the great reset slowly happens

Thank you in advance

[VeryMeanReversion]

Partly depends on your mortgage rate.

If it's 0.5% fixed for 10 years, invest the money.

If it's standard variable rate then clear the mortgage.

For me, I build up a large sipp with the intention of clearing the mortgage at 55 as you can now partly do. In practice, I've cleared it before age 55 and not having a large monthly housing payment is a great feeling.

I think it's a good time to be reducing risk, clearing a mortgage as much as possible helps.

I get the impression that you are not a speculator 

[RWJ]

I was in a similar position recently.  Had enough savings and investments to pay off the mortgage, when my fixed rate ended Jan 31.  Wrangled with all the options - pay some off, take another deal, offset etc.  Finally I decided to just pay the fucker off and be done with it.  I didn't want to give banks any more interest or the arrangement fee for a new deal. 

I also think the markets have to tank at some point soon, given the economic mismanagement of the last few years so equities possbily not a good place to be.  Cash is getting destroyed by inflation and if it all goes south, there's always the possibility of bail-ins and other outright theft.

Feels good to be mortgage free and know that I could take a job with ½ the salary and be ok.

(I've left a couple of K on it so they continue to safeguard the deeds)

[Frank Hovis]

For myself personally, DYOR etc., I would always want to pay down debt unless, as @VeryMeanReversion, it's on a ridiculously cheap deal then I would invest elsewhere and pay it off when that cheap deal comes to an end.

Not paying it down, or not planning to pay it down in this deferred fashion, is a leveraged investment strategy and the big two problems with those for indivdiuals are the higher risk of things going badly wrong and that you are taxed on your gains / income but receive no equivalent tax relief on your interest payments.

I do though have a hatred of debt.

I paid off my first mortgage within two years and bought my next house for cash.

Prior to the first I was living in a shared house and prior to the second I was living in cheap rentals, both in order to accumulate the funds to firstly have a big deposit and then to buy outright.  I knew that I would never be comfortable with a  huge mortgage debt hanging over me so never took one on.

[sancho panza]

@Frank Hovis and @VeryMeanReversion give good advice.the investmetn markets at the minute are for people who are comfortable with the risks.No offence but if you're asking this sort of question then I'd leave crypto and voltaile stocks to otehr people.

I think clearing your mrotgage (unless it's on a super low 10 year) is rock solid advice.

Mortgage freedom is a big step away from ebing forced to run on the treadmill.dyor natch

[Frank Hovis]

12 minutes ago, sancho panza said:

@Frank Hovis and @VeryMeanReversion give good advice.the investmetn markets at the minute are for people who are comfortable with the risks.No offence but if you're asking this sort of question then I'd leave crypto and voltaile stocks to otehr people.

I think clearing your mrotgage (unless it's on a super low 10 year) is rock solid advice.

Mortgage freedom is a big step away from ebing forced to run on the treadmill.dyor natch

 

Indeed.

My stock market investments were at an all time high at the end of play yesterday.

As my policy is always "buy and hold" I take that as good news but not a reason to sell.  They will go lower, then higher, then lower, but long term they always comfortably outperform ever other mainstream investment.

You just have to be prepared to hold long term; being for me well over thirty years for the market as whole.

[Wight Flight]

4 hours ago, John OLooney said:

I have a mortgage of £60k left to pay and ive just come into some cash as ive just turned 55 and drawn down 25% of my pathetic pension pot that they have hammered for the last decade

I did this before they plundered the pension pot totally, there is always an excuse to do so isnt there......

Now the choices i can make is this I could pay half of my mortgage off basically with my savings and what ive pulled out of the pension

Do i do that wondering what is about to happen to the financial market ? Do i buy bullion perhaps ? or Do i pay as much off the mortgage as possible ?

I dont fancy crypto in honesty because i sense you have to be part of the matrix to access it, a matrix they are about to tightne up significantly to shaft people.

Im leaning towards gold and silver, but i do want rid of the mortgage

your thoughts please as intrest rates rise and the great reset slowly happens

Thank you in advance

I take it as a positive that you think there will actually be a future 

[wherebee]

15 hours ago, Wight Flight said:

I take it as a positive that you think there will actually be a future 

indeed.

when a man is talking about mortgages, property, and pensions, that shows that the world aint going to end next year....

 

[Yadda yadda yadda]

What we're talking about here is opportunity cost. The cost of your capital is the income you can get from it. What is the basic rate of return you can achieve? Compare other investments to that. First see what your mortgage rate is. Are you on a fixed deal and, if , are there early repayment penalties? Is the mortgage interest rate lower than putting the money in a bank account? If the mortgage is fixed then how long for and what will the interest likely be when it runs out? Unless you have a long fixed rate interest rate increases likely mean it will be difficult to earn significantly more than that. Especially once you take into account tolerance for risk.

I have a reasonably high risk tolerance. I would use at least half the money to pay down the mortgage. I would keep it in the bank if there is a fixed rate period and pay it off as soon as there are no penalties to do so. Unless the mortgage is fixed for a long period, at least three years. In that case I would invest some of it with the proportion invested increasing with the length of the fix. If I was anywhere near retirement my risk tolerance would be much lower. After all the peace of mind of owning a home outright must be great.

[Option5]

19 hours ago, Frank Hovis said:

I paid off my first mortgage within two years and bought my next house for cash.

I followed a similar strategy but it didn't work out quite as well for me .

First flat, paid cash, sold and moved to a bigger place, small mortgage paid off in two years, sold that and did the same again.

Gave house away (divorce) and started again.

Bought with big (for me) mortgage, paid off in 7 years. Moved, small mortgage paid off in three years.

Gave house away (divorce) and started again.

(Do you see a pattern emerging?) 😂

Bought with average mortgage but sold because I was never there, due to working away.

Not bothered since.

 

[humdrum]

45 minutes ago, Option5 said:

I followed a similar strategy but it didn't work out quite as well for me .

First flat, paid cash, sold and moved to a bigger place, small mortgage paid off in two years, sold that and did the same again.

Gave house away (divorce) and started again.

Bought with big (for me) mortgage, paid off in 7 years. Moved, small mortgage paid off in three years.

Gave house away (divorce) and started again.

(Do you see a pattern emerging?) 😂

Bought with average mortgage but sold because I was never there, due to working away.

Not bothered since.

 

So your point is that you are a good businessman with a sound knowledge of the property market, but with a total inability to keep your trousers up?

Twas ever thus.

[King Penda]

1 hour ago, Option5 said:

I followed a similar strategy but it didn't work out quite as well for me .

First flat, paid cash, sold and moved to a bigger place, small mortgage paid off in two years, sold that and did the same again.

Gave house away (divorce) and started again.

Bought with big (for me) mortgage, paid off in 7 years. Moved, small mortgage paid off in three years.

Gave house away (divorce) and started again.

(Do you see a pattern emerging?) 😂

Bought with average mortgage but sold because I was never there, due to working away.

Not bothered since.

 

I’ve got a friend with big tits that’s looking for a house i er mean a man 

[ashestoashes]

remortgage the house and expand your business, death rate's only going one way

[Frank Hovis]

1 hour ago, Option5 said:

I followed a similar strategy but it didn't work out quite as well for me .

First flat, paid cash, sold and moved to a bigger place, small mortgage paid off in two years, sold that and did the same again.

Gave house away (divorce) and started again.

Bought with big (for me) mortgage, paid off in 7 years. Moved, small mortgage paid off in three years.

Gave house away (divorce) and started again.

(Do you see a pattern emerging?) 😂

Bought with average mortgage but sold because I was never there, due to working away.

Not bothered since.

 

 

I was renting for sixteen years between owning, I saw an owned house as a liability or shackle when I was moving around for work.

I was also fairly baffled by unfurnished lettings, which seem to bring for the tenant as much hassle in moving as if they owned the place. I didn't own a stick of furniture in those sixteen years and could move in one or two trips in my car.

Usually with a pile of pillows and duvet leaning into me from the passenger seat.

[Option5]

1 minute ago, Frank Hovis said:

 

I was renting for sixteen years between owning, I saw an owned house as a liability or shackle when I was moving around for work.

I was also fairly baffled by unfurnished lettings, which seem to bring for the tenant as much hassle in moving as if they owned the place. I didn't own a stick of furniture in those sixteen years and could move in one or two trips in my car.

Usually with a pile of pillows and duvet leaning into me from the passenger seat.

My last four moves have been by aeroplane, two trips with two suitcases.

[Frank Hovis]

Just now, Option5 said:

My last four moves have been by aeroplane, two trips with two suitcases.

 

And I thought that I was minimalist!

After my first proper move I became fairly ruthless with books because I had been buying them for a pastime and simply popping down to Argos for another tall bookshelf every time I filled one.

They were bulky an heavy and filled many boxes, I now have two waist high book cases and a one in one out policy.

There are few books I actually regret giving away but if I do then they are usually available cheaply second hand online, I bought back a previously much loved paperback last year for about three quid.

[Upsettah]

I know 25% of the pension is tax free, but I would probably have taken the whole damn lot and taken the 20% tax hit.

That would have paid off your mortgage in its entirety, presumably?

There's no substitute for the liquidity and flexibility of cash. Gold, silver and precious stones won't be of any use when the food runs out either.

A bit 'doomer' I know, but that's me.

[Bilbo]

45 minutes ago, Upsettah said:

I know 25% of the pension is tax free, but I would probably have taken the whole damn lot and taken the 20% tax hit.

Unfortunately the rest becomes taxable income and is added to any other income ie. your pay. You would probably get hit with at least the 40%tax rate. 

I know nothing DYOR

[Upsettah]

11 minutes ago, Bilbo said:

Unfortunately the rest becomes taxable income and is added to any other income ie. your pay. You would probably get hit with at least the 40%tax rate. 

I know nothing DUOR

Ah ok, I'm just thinking about my pissy little workplace pensions which are worth a grand total of maybe £25k - cashing those in at 55 isn't going to put you in that tax bracket. Now you mention it I suppose John has invested in a 'proper' pension which will potentially pay SOMETHING worth having at age 65 or whatever, so yes - his mileage probably will vary.

Mind you, even if I had to pay 40% I probably would still take the hit, bearing in mind what's coming down the road towards us all.

 

[working woman]

I'm 56.  We have a lot of decisions to make once we hit 55 and can access private pensions.

You need to think very carefully about this, particulalry as the next few years look very challenging. 

Many older people 70's/80's end up house rich, cash poor. ie have a large paid off home but no cash or cashflow to maintain it. Hence why you see older people's homes for sale that have really old furniture and need a lot of work as they didn't have the cash to pay for it.

If you pay off your mortgage and property prices go down, you will have "lost" that cash. How will you feel about that? 

Idea no. 1

Sell the property and buy something smaller/cheaper with no mortgage,  Get to keep your pension cash.

Idea no. 2

Have an Offset Mortgage*. I have an OM. 

An OM lowers your monthly bills, as you have less interest to pay.  When your mortgage is paid off, you still have your cash lump sum. Yes it will buy less due to inflation, but at least you will have something to use for repairs and buying new items for your home etc.

You can also withdraw your savings as and when you like, and you can replace your savings if wished, effectively using your own savings as a  low interest rate "loan facility" . The challenge is the discipline of paying yourself back

(*For anyone who doesn't know how an OM works, you have a mortgage and a savings account that are linked. Your savings can be any amount. The interest on your cash savings is used to pay off some or all of the  monthly interest on your mortgage or to pay down the capital debt each year on top of your normal capital repayment.

 

Another idea is each year, look at how much debt your have repaid off of the debt, eg 2K and with draw that from 2K your savings, as you no longer need it to balance out interest on that 2K. Then invest it if you think you can get a better return. 

Having cash savings in any form is useful. 

 

 

 

 

 

 

 

 

[eek]

I don't think anyone offers an offset mortgage that continues beyond your state pension retirement date

[23rdian]

On 03/02/2023 at 09:49, Undertaker1968 said:

I have a mortgage of £60k left to pay and ive just come into some cash as ive just turned 55 and drawn down 25% of my pathetic pension pot that they have hammered for the last decade

I did this before they plundered the pension pot totally, there is always an excuse to do so isnt there......

Now the choices i can make is this I could pay half of my mortgage off basically with my savings and what ive pulled out of the pension

Do i do that wondering what is about to happen to the financial market ? Do i buy bullion perhaps ? or Do i pay as much off the mortgage as possible ?

I dont fancy crypto in honesty because i sense you have to be part of the matrix to access it, a matrix they are about to tightne up significantly to shaft people.

Im leaning towards gold and silver, but i do want rid of the mortgage

your thoughts please as intrest rates rise and the great reset slowly happens

Thank you in advance

Why do one thing? Pay 50 towards mortgage. The rest in PMs etc.