Sometimes It's OK to Ignore the Maths

Editor's View: Choosing between mortgage payments and Isa investing is a decision about more the numbers, why volatility matters and the risks of buying high-profile IPOs

Holly Black 5 March, 2021 | 11:19AM
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Should you use spare cash to pay down your mortgage or to invest in the stock market? On paper, it’s a no-brainer. The stock market can return, say, 10% a year whereas your mortgage might only charge interest of 2% at the moment. That means you’re technically 8 percentage points better off by investing.

The growth you achieve through the investment on that basis could mean you pay off your mortgage more quickly with a lump sum at a later date, rather than chipping away at it with smaller ad hoc amounts.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk