Originally posted by vetran
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Overpay the mortgage VS saving
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Originally posted by ChimpMaster View PostHi Vetran. Sounds similar to my situation. Looking at selling current home and moving to a 'much more expensive house' as you put it, but this will necessitate a £600k mortgage. Not sure I want the financial challenge but the 'forever home' dream could be achievable here. And frankly, I'm a little bored without having a mortgage to pay offAlways forgive your enemies; nothing annoys them so much.Comment
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Originally posted by vetran View Postoh I couldn't sleep with a £600K mortgage or service it !
A 2 year fix brings the rate down to 1.09% (£2290). Or 5 years at 1.84% (£2490).
I'm not saying it's the right or wrong thing to do, just that I hadn't really considered such a large loan being relatively manageable before.Comment
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Purely from a math point of view - if the interest on your savings (after fees & tax) is higher than the interest of your debt, then you should save as opposed to overpaying. However, mortgages are a bit different than your typical debt in that you only have your rate for a certain period of time and thus need to consider the risk of a rate rise in the future.
Personally I'm doing this:
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Take 43k out of company, eat the 2k tax. (Same for the other half)
Eat 3-4k per month "living" expenses.
Overpay the mortgage 10%
Vanguard lifestyle ISA
Business
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Savings account for the tax / warchest
Extra to Vanguard lifestyle (math wise this should be a wrapped in a SIPP, but I don't do that)
Once I have 100k in the vanguard looking at getting a SPV for a company BTL
Maybe Peer2Peer lending.
Diversify for average returns over the long term. Near term doesn't matter that much since I won't be taking the money out because I don't want to pay the tax. Don't bet on individual stocks, don't try to get rich quick.
Just my opinion; YMMV.Last edited by fool; 23 October 2016, 11:50.Comment
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Originally posted by fool View PostPurely from a math point of view - if the interest on your savings (after fees & tax) is higher than the interest of your debt, then you should save as opposed to overpaying. However, mortgages are a bit different than your typical debt in that you only have your rate for a certain period of time and thus need to consider the risk of a rate rise in the future.
Personally I'm doing this:
---
Take 43k out of company, eat the 2k tax. (Same for the other half)
Eat 3-4k per month "living" expenses.
Overpay the mortgage 10%
Vanguard lifestyle ISA
Business
---
Savings account for the tax / warchest
Extra to Vanguard lifestyle (math wise this should be a wrapped in a SIPP, but I don't do that)
Once I have 100k in the vanguard looking at getting a SPV for a company BTL
Maybe Peer2Peer lending.
Diversify for average returns over the long term. Near term doesn't matter that much since I won't be taking the money out because I don't want to pay the tax. Don't bet on individual stocks, don't try to get rich quick.
Just my opinion; YMMV.
I'm interested in the SPV idea. Have retained profits doing nothing in the company account and have considered SPV but not had time to pursue yet.Comment
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Originally posted by ChimpMaster View Post£4k / month living expenses! Really?
I'm interested in the SPV idea. Have retained profits doing nothing in the company account and have considered SPV but not had time to pursue yet.
Living down south isn't cheap. Not worth doing unless your rates are high.Comment
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Originally posted by WTFH View Post£4k including your mortgage isnt high (IMHO).
I reckon my expenditure is ~£2,000 / month excluding mortgage.Comment
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Originally posted by fool View PostPurely from a math point of view - if the interest on your savings (after fees & tax) is higher than the interest of your debt, then you should save as opposed to overpaying. However, mortgages are a bit different than your typical debt in that you only have your rate for a certain period of time and thus need to consider the risk of a rate rise in the future.
Personally I'm doing this:
---
Take 43k out of company, eat the 2k tax. (Same for the other half)
Eat 3-4k per month "living" expenses.
Overpay the mortgage 10%
Vanguard lifestyle ISA
Business
---
Savings account for the tax / warchest
Extra to Vanguard lifestyle (math wise this should be a wrapped in a SIPP, but I don't do that)
Once I have 100k in the vanguard looking at getting a SPV for a company BTL
Maybe Peer2Peer lending.
Diversify for average returns over the long term. Near term doesn't matter that much since I won't be taking the money out because I don't want to pay the tax. Don't bet on individual stocks, don't try to get rich quick.
Just my opinion; YMMV.
Though I suspect a lot of debt is going to be inflated away again shortly.Always forgive your enemies; nothing annoys them so much.Comment
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Originally posted by MrMarkyMark View PostAgreed, your advice hasn't been helping and that premium number is costing me a fortuneComment
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