lump sum

E

eok56

Registered User
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Hi Looking for some advice re mortgage/lump sum.

I have about 20 k left over from my mortgage, I was just going to pay it off the mortgage but some people have being advising me to put it in a high interest account for a "rainy day".

I think my job is safe but in this climate does anyone know?? Would it be wise to save it just in case my job goes or should I pay it off the mortgage and save loads in the long term??
 
One of the key questions here is what is the interest rate on your mortgage?

If the interest rate is very low (lower than savings rates less DIRT) then you are better saving than paying off your mortgage.

The highest savings rate out at the moment is 5.58% with Investec for a 6 month term deposit.
 
Hi could you advise on how you actually calculate that please.
example
20 year mtg outstanding on variable of 4.13%
Have lump sum to invest of 45K - currently earning 3.05% due to rollover next week.
Best to put some of this against the mtg or put in a higher earning account? not sure what smart move is here, debated too long and concerned over the stability of banks and the state guarantee if it all goes pear shaped.
 
The Best Savings rate Gross is 5.58% with Investec
That is about 4.30% after DIRT.

Your mortgage interest rate is 4.13% Plus you are earning TRS on this Plus the rate is likely to fall over the next 6 months with further ECB cuts.

Therefore, you are probably slightly better off saving than paying off your mortgage but it is a close call in your case.
 
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