Advice-500k mortgage,200k Cash.What to do?

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foley26

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Have 500k mortgage on property that's (still!)worth more than mortgage - est prop worth 600-700k. Salary is fine to cover mortgage and the increased payments of 1k/month I've been making to accelerate mortgage repayment.Have 100k cash on deposit.

I "think" conventional wisdom would tell me to put the 100k cash against mortgage and continue to pay down the mortgage, but in an era where cash is king, interest rates are coming down etc I'm asking myself, why am I rushing to repay my mortgage? Why not reduce mortgage payments to int only thereby increasing cash position so as to take advantage of reduced asset prices going forward?
 
I would keep cash in a high interest deposit account.

Increase monthly repayments (if you can afford to) on mortgage to get benefit from lower interest rates.

If you loose your job it will feel a lot better having a good wad of cash in your bank account.

You could use the interest on your money on deposit towards top up mortgage payments.
 
OK, with interest rates down again now, I guess it's "easier" to do both..ie conserve cash and accelerate mortgage payments..thanks
 
If you reduced your mortgage you will also be reducing your mortgage interest relief if you are entitled to relief so you would have to consider that especially if you are on the marginal rate of tax
 
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