Invest or Pay Off Mortgage Early? Ed, Tommy, Cyra & Andy Discuss

Invest or Pay Off Mortgage Early? Insights from Financial Experts
This discussion features a diverse panel including doctors and financial experts debating whether to invest surplus money or use it to pay off a mortgage early. The conversation highlights the lack of a one-size-fits-all answer, acknowledging that personal circumstances significantly influence such decisions. Topics discussed include the impact of interest rates on decision making, the psychological comfort of being debt-free, tax implications, the consideration of potential inheritances, and the flexibility provided by offset mortgages. The overarching message is the importance of aligning financial strategies with personal goals and circumstances while remaining open to adjusting plans as those circumstances change.
00:00 Introduction: The Great Mortgage Debate
00:22 The Mayhem Begins: Diverse Financial Strategies Unveiled
00:56 Tommy's Simpleton Theory on Debt Repayment
02:46 Ed's Personal Journey and Mortgage Overpayment Decision
05:50 Cyras Investment Strategy Over Mortgage Overpayment
13:23 The Psychology of Money and Mortgage Decisions
17:00 Exploring Alternative Financial Strategies
23:14 The Role of Inheritance in Mortgage Decisions
25:25 Considering Offset Mortgages as a Strategy
28:11 Final Thoughts and Reflections
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DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice and tax allowances and rates are subject to change.

[@akosiamarillo]

I do three ways. Overpay mortgage, save into S&S isa and pay into NHS pension. Regardless of mortgage rate, paying it off early thus reducing interest paid is guaranteed. Plus you have the peace of mind of having a secured abode.

[@eneobande7433]

Thanks for this. I really enjoyed this. I'm in favor of overpaying but that's because I'm on a 5year fixed rate with a low interest - 1.64, from covid times. I'm hoping to pay as much off before the fixed rate ends.

[@MedicsMoney]

Glad it was helpful!

[@ime06]

A really usual episode! I think it just highlights how personal all the decisions can be. I think it could have been useful to delve deeper into the tax implications! I wonder if anyone on the panel invests beyond ISA allowances for example. The position I've landed on is to invest the full lifetime ISA allowance in order to get the 25% government bonus, and then overpay the mortgage with any remaining income, as the flexibility of having lower outgoings is very powerful for me!

[@MedicsMoney]

Beyond ISA, VCT and EIS are tax reducers and can be useful.

[@DrDre999]

Your videos are always so helpful - thank you! I appreciate what you said about the rate of house price increase not actually being that significant anymore and you might actually gain more investing. I'm debating whether I should hold out buying my first home for a few more years (where I could hopefully afford something a bit nicer) and invest some of the deposit money I had saved up instead. A lot to ponder

[@MedicsMoney]

😍

[@minimad8793]

Stumbled across your video. I currently do both, pay into an ISA (sorry typo then) and a Sipp, but also overpay monthly to get to a point where I am able to pay off the mortgage earlier.

[@MedicsMoney]

Stumble no more - hit the subscribe button for a new video each week - unless we’re on call then it’s work/sleep/work repeat.

[@jamie3101]

So confused at the comments about minute 7/8. "the mortgage is mo lowest debt at 4-6%" , implying she has debts that have interest rates beyond 6% and yet she is investing that money expecting tax free/charge free returns of greater than 6%? And why no discussion about charges and tax. You can only put 20k per year in a tax free ISA wrapper.

[@MedicsMoney]

I think Cyra was referring to her student loan? Which currently has an interest rate of 7.8% but because of the way the student loan works making overpayments on the student loan might mean you end up worse off.