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People on here keep telling me my logic is flawed, but it seems like it’s one of the safest ways to ‘grow’ your money, by not ‘spending’ it on long-term interest.
It's a bit flawed.
If you've got the money and you're earmarking it to pay a lump sum later then you may as well overpay as you go. That way you're reducing the interest throughout the term rather than just in chunks every 2/3/5 years.
This assumes you're allowed some overpayments. Most do allow some.If the mortgage is 1.8% then any way of saving that lump sum and earning more than 1.8% (riskier certainly, but historically not too tough to find) would make you more money than you're spending on the extra interest, so even though you'd spend lots on long term interest, you'd earn that plus some more on the investments.
duncs-
Mortgage advisor was saying he takes out interest only then puts what he would have paid as capital repayment into ETFs like S&P500 which generally give a pretty reliable rate of return (even if you look at the drop last march/april he will still be up over period).
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[removed rubbish advice]
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would make you more money than you're spending on the extra interest, so even though you'd spend lots on long term interest, you'd earn that plus some more on the investments
Yes. The ‘overpay your mortgage’ is kind of residual advice from when interest rates were 5% and the rest. In low interest rates / significant inflation situations you would do better to invest as there’s a chance you won’t come out poorer.
French_Touch
Jonny69
Howard
[removed rubbish advice]