Hi!
I have some surplus income, very little saved towards retirement and hence discovered Jeremy’s great investment advice. So the obvious route is to invest my surplus into a tax advantaged pension with index funds.
An alternative option is to increase my mortgage debt to fund an extension to my home. I am in the building trade and so the increase to equity is very likely to exceed the costs involved.
What are people’s thoughts on proceeding with this?
The rough figures involved are;
Increase in mortgage £80k.
Increase in house value £130k.
Interest rate 1.8%.
Extra mortgage payment £331/month over 25 years.
I would still be able to make a contribution towards a pension of £200/month but obviously this could be £531/month without the home extension.
I guess it in part comes down to being able to ‘invest’ £80k of the banks money now into my property, vs £331/month of my money into index funds.
Any thoughts appreciated!
Excuse my £’s, I’m in the UK
