Pay off mortgage or maximise AVC’s

F

fionafar

Registered User
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We have 100000 from the sale of an investment property we were planning to use this money to buy another investment property which our children could potentially use in 9 years time. We are now wondering would we be better off paying our mortgage we currently owe 100000 paying 3% interest and there is 8 years left or maximising our avc contributions?
Any recommendations would be much appreciated.
 
Hi fiona

You should complete this

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
www.askaboutmoney.com

to get some fuller suggestions.

As a general rule, you should clear your mortgage before investing. By doing so, you get a 3% , risk-free and tax-free and hassle-free return on your money.

Then you have to decide if clearing your mortgage takes priority over contributing to a pension fund. But this depends on the overall picture so you need to provide the extra information.

It might be worth reading this thread for some general background.

Key Post - Pay down your SVR mortgage before starting a pension, but don't leave it too late

Summary of thread's conclusions (but it's worth reading the thread in full, as differing views are discussed) 1) If you have a cheap tracker mortgage, you should not pay it off early. Putting any spare cash into a pension fund(or some other investment) would be a lot better. 2) If your...
www.askaboutmoney.com

Brendan
 
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