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Use a mortgage calculator like this one to see what your overall cost of the mortgage will be ie across the whole term, not just the 5 years of the fix or whatever. You might find that putting the £100k into your mortgage and shortening the term right down saves you a SIGNIFICANT amount of money overall. With mortgages, it’s the duration of the loan which results in so much interest. I took about £90k off my total repayable by simply dumping some savings in and shortening the term so that my monthly repayable amount was about the same.
http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml
Obviously it helps if you understand the maths. Get expert help if you think you need it.
Jonny69-
Difficult to argue that money borrowed at 1.6% year on year or whatever producing a compounded return at 6% year on year would be better spent by not borrowing it in the first place, but agreed it's worth understanding the figures of each of your choices. Actually is mandatory - the real trick is calculating the risk and worst case / best case scenarios :)
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shortening the term right down saves you a SIGNIFICANT amount of money overall
But on the other hand investing that money elsewhere can generate a more SIGNIFICANT amount of money.
Obviously depends on your appetite for risk but with the current low rates of debt you can probably generate more by not paying the mortgage off.
Howard
aggi
It's time for me to remortgage. My LTV is currently 60% and my rate is 1.64%. I can move to a 5 year fixed with my current provider at 1.59% with a product fee of £1499. (I haven't yet looked at remortgaging elsewhere).
I have £100k that I can either put into a SIPs or chuck into the mortgage. I'm nearly 42 with not much pension savings currently.
Where am I best to put the money - mortgage or pension?