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The Property Podcast
ASK450: Should I over-pay my mortgage? PLUS: Did the government just find £16 billion?
Oct 15, 2024
Listeners dive into the pros and cons of overpaying a mortgage versus investing for greater returns. One question explores whether reducing monthly mortgage interest can boost overall profitability. Another significant discussion centers on government debt and potential new spending, speculating its impact on the property market cycle. The hosts provide insights that challenge conventional wisdom, ultimately reassuring that recent funding changes may not significantly alter market dynamics.
06:25
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Quick takeaways
- Making overpayments on an interest-only mortgage may reduce interest costs, but it could limit cash available for property investment expansion.
- The government's potential £16 billion accounting change is minor relative to total spending and unlikely to significantly affect the property market.
Deep dives
Maximizing Profitability Through Mortgage Management
Making overpayments on an interest-only mortgage can seem appealing as it may reduce the monthly interest and improve profitability. However, it's important to assess whether this approach provides better returns compared to alternative investments, especially if higher returns are achievable elsewhere. While paying down the mortgage may offer marginal benefits, it ties up cash that could otherwise be used for expanding a property portfolio, which is typically the preferred strategy for growth. Ultimately, retaining liquid cash is advantageous unless an individual is certain they do not wish to invest further in real estate.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode