Where to Put a Lump Sum?

Hibernicis

https://www.boards.ie/discussion/comment/120246543#Comment_120246543

CPTM I think you are on to a good thing here. This is my experience:

My mortgage started at 8% give or take. In the first few years the rate dropped 7%, 6%, 5%, 4%. I never decreased my monthly repayments. I also threw in the benefit of a few income tax reductions and pay increases over the years. The impact of all of these overpayments was significant - remember that overpayments go 100% against the principal and have a compound effect on interest due in future years. Net result was that in year 11 (of a 20 year mortgage) I was able to use a small inheritance to pay off the mortgage balance. I won't pretend that it was all easy, or that there weren't some sacrifices. But I will never forget the day I drove into the bank and collected the deeds which were now 100% mine, nine years ahead of schedule. At that moment the sacrifices over the years seemed very very insignificant and definitely worthwhile.

Financial savings apart, the big positive for me was some years later when I had an "annus horribilis". The circumstances aren't relevant, but the relief of being able to make some pretty major decisions without having a mortgage around my neck saved me. Yes I had forgone a few fancy holidays, and kept a couple of cars a year or two longer than the neighbours, but the simple gesture of being able to turn MY key on the inside of the front door of MY house when all outside looked bleak was powerfully positive. I've never regretted overpaying, not once.

Fieldsman

Richard if I were in your shoes I'd contact Credebt Exchange

https://www.boards.ie/discussion/comment/120246317#Comment_120246317

Capital gains tax of 33% with no deemed disposal rules

AndrewJRenko

https://www.boards.ie/discussion/comment/120246993#Comment_120246993

And same for most shared funds, non ETF funds, which are another option for the OP.

daheff

https://www.boards.ie/discussion/comment/120246543#Comment_120246543

its not just about maximising money earned. its about using it wisely.

My point on a random unexpected expense -what if you lose your job and thats why you need the money. you won't be able to borrow anything in that situation. maybe you could have lived on savings for a while until you get a new job.

also to your point on spending money on children....you are only really moving the deckchairs around. pay out of savings or pay out of current income.

My point still stands that using a lump sum to pay off debt isn't necessarily the 'no brainer' option. You need to look at the figures. I get a lot of people prefer not to have the debt hanging around their neck, but if they use their money wisely they can get rid of it cheaper & quicker than just using spare cash to pay off a loan.