Buying shares Vs paying off mortgage early

A

ali1971

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I have recently been purchasing small quantities of shares for my hubbie and I as we probably won't have much of a pension.
However our mortgage is an AIB tracker one and we have about 86,000 left to pay over 15 years. Would you recommend paying off the mortgage a bit early instead? We are in our mid 30s.
 
It all depends on your attitude to, and appetite for risk. Paying off your mortgage gives you a guaranteed return equivalent to the mortgage interest rate, reduced slightly by the effect of TRS.

If you believe that the shares you are buying will give you a higher return than this after all taxes and charges, then shares are the way to go. But you have to accept that the value of shares can go down as well as up, or even be wiped out altogether.

Incidentally, you mention that you won't have much of a pension. There are usually various tax-efficient ways of improving your pension, which could be a third option. Some ("self directed" or "self administered" pensions) even allow you to continue buying shares, but with tax relief associated with a pension.
 
Thank you for your reply. The third option sounds good but I currently have a private pension scheme with my employer. Can I have a separate one too? My husband isn't paying into any type of pension.
 
ali1971 said:
Thank you for your reply. The third option sounds good but I currently have a private pension scheme with my employer. Can I have a separate one too? My husband isn't paying into any type of pension.
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Yes within certain limits, you can make additional contributions to your employer's scheme or a separate arrangement of your own.

If your husband is in employment or self-employed, he can also start his own pension. You don't want to be paying for him in retirement do you? :D
 
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