Interest only mortgages, what’s the point?

I’m going to walk through my thoughts on what an interest only mortgage is, the advantages and pitfalls of them, and how they can be used to potentially pay off your mortgage in just over two thirds of the time. If you can’t be bothered to have a read, then I made this video covering the same topic. Many bloggers and YouTubers will tell you that the best way to be mortgage free in the quickest amount of time is to overpay your mortgage each month, in order to pull down the balance, and ultimately the term of your mortgage. Now I’m going to suggest another strategy which may seem counter-intuitive, and some may have heard of but some might not have. That’s to pay down as little of the debt as possible, per month on an interest-only mortgage. Then use how much you can afford on a repayment mortgage to invest in the stock market. Now hear me out on this one, as I’m about to explain why this could work for you. How it all works Before I go into the details of the interest only mortgage and how it could save you money, it’s worth having an […]

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The 4% rule and tax efficient investment wrappers

In this post I wanted to follow on from the last, by going into more detail about the smart investments available for someone living in the UK. The 4% rule. So what is it? In 1994 a financial planner named William Bengen proposed that a retiree could withdraw 4% of a retirement pot each year and not outlive that pot. This effectively means 25 times your salary. So if you can live comfortably on £20,000 a year, this would mean you can retire when you have a pot of £500,000. […]

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