Hi everyone
I bought a house in April this year. It was a trade up from the first home I bought 6 years ago and I paid £325,000 with a £211,250 mortgage, the deposit coming from the sale of my last place. I've found after the move I have around £28,000 in savings, although I'm going to need around £4k of these for pay for various jobs around the house that need doing. The mortgage is a five year fix at 1.75% with ERCs until April 2023. I'm allowed to repay 10% per year on top of the regular payments without any charge, so in theory I could pay £21,125 as a lump sum and bring the balance down, leaving me with around £3k in cash savings.
I earn slightly under £30k a year in a sort of sales job, so my income could go up at some point, but I wouldn't expect it to go down. I also make gross rental income of around £9,800 a year, but the overheads are high so net profit is far less than this. I'm a lower rate tax layer at present, but am concerned that if my employed wage increases that I could go into the 40% tax bracket with the rental income on top so wouldn't qualify for the rental mortgage interest being tax deductable. I've always paid into work pensions, but only ever at the 2-3% of my salary whatever employer I had at the time would match. Honestly I have no idea what my existing pension pot is but it can't be big.
I really don't know what the best option is as cash savings really aren't getting much of a return and I'm sure there's a more effective way to use the money. I've always been put off by stocks and shares, I dabbled in them years ago and made a small loss so I've been put of ever since. Realistically I've probably got around 30-35 years left of working.
Any suggestions would be appreciated.
Edit: Forgot to add that I'm able to save in the region of £800 per month give or take so can build a savings balance up again if need be.
Edit 2: amount of cash savings available.
Submitted August 17, 2018 at 09:27AM by matej86 https://ift.tt/2OGLOtu
