C/A Mortgage or Property fund

[pennypincher]

I've read through some of the posts regarding items above but can't seem to find answers.If I owed 100k and had 50 in savings I only pay interest on 50K which means I'm saving 3.6% on the other 50 K.The local FA advisor is saying ,put X into their property fund(Much sought after locations,guarenteed rental income etc-List provided)and I'll return15-18% each year over 5 years(look at last 5 years),but say things take a down turn,then they've caclulated a return of 7-10% but that would be a drop of 50% which would be almost impossible!They charge 1.65% on the whole amount each year ,after 5 years you can cash it in and will have made more money than using their current account mortgage,even after DIRT.I know this is not independent advise but just wondering has anyone else looked at this product,what were your thoughts,I'm thinking 3.6% guarenteed is great but for a return of 15% I need to think again....

 

[ClubMan]

The local FA advisor is saying ...

What is an "FA advisor"? Do you mean a First Active advisor (tied agent/salesperson)? Or do you simply mean a financial advisor? If so what sort of advisor? If s/he is a tied agent then look elsewhere for independent advice rather than just a sales pitch (and an aggressive/optimistic one by the looks of it). Talk to a good multi-agency intermediary or an Authorised Advisor instead.

Assuming that the money is not required for other purposes in the short or medium term then it might make sense to use it to at least get the mortgage down to a mangageable level (some people use twice one's gross earnings as a yardstick of this) and by making a lump sum capital repayment reduce the term and cost of the mortgage (assuming you keep the repayments at the pre capital repayment level).