invest or reduce mortgage??

[Roundy#]

I'm currently building a house. No mortgage yet.....but it's forthcoming and I will be taken out ~€120k-€150k to finish the build. I've €40k in additional savings and a full SSIA on the way....so ~€60k in savings

Question is ...would I be better off in reducing the mortgage amount (the house will be valued ~€550k and will have a LTV mortgage from NIB with a rate of 0.5% tracking the ECB rate) with my savings...........or would i be better off investing the €60k elsewhere??

I was thinking of spilting my savings into something solid like a Rabodirect savings account and some form of risk based equity investment.

 

[skrooge]

It’s generally recommended that you pay off your outstanding debt before you start saving/investing. This is usually the case as rates of interest on loans are higher than savings rate. However, as this site has shown, the current savings rates can actually reduce your mortgage bill (see http://www.askaboutmoney.com/showthread.php?t=41329&highlight=risk-free).

On the savings front recommend you use either Rabo/NR and feed regular savings accounts (Anglo, Halifax, BOI).

Stock markets are considered better suited for long-term investments. Using the stock market to pay off a mortgage is appealing but be careful that’s the principal that an endowment mortgage is based on and there are many cases of such strategies falling short of the required amount. It all boils down to how much risk you are willing to take on.