hi and welcome back to the channel my name is pete matthew i'm a chartered financial planner based in the uk and i've been putting up videos on youtube for more than NUMBER_TOKEN years giving you everything you need to know and everything you need to do to secure your financial future so you've got some spare money either as a lump sum or regularly each month should you put that extra money towards getting rid of your mortgage more quickly or should you invest it i want to give you the numbers and the rationale behind this so that you're actually informed about it so that you can make a good decision for yourself but before we do that as you're watching this if you find the video useful please do hit the like button and subscribe to the channel it helps the almighty youtube algorithm to put these videos in front of more people so that they can understand their finances better thank you for your help firstly let me just correct myself here before i begged you for a subscription just now i asked should you overpay your mortgage or should you invest now regular viewers will know that i hate the word should with personal finance there are actually very few things that are non-negotiable there's never really a perfect path through every decision regarding your finances and for most of us we live in a free country so we can actually do whatever we like with our own money so let's talk instead about what you could do and let's get to the two sides the two factors of this decision so that you can weigh them for yourself and apply them to your unique circumstances so factor number one is maths mathematics math for our american cousins let's say for the sake of example here that you find yourself in the great position of having NUMBER_TOKEN pounds per month extra that you can decide what to do with let's also assume that you have a two hundred thousand pound repayment mortgage with twenty years left to pay assuming two and a half percent interest on that your monthly payment will be a thousand and sixty pounds per month and the total interest you'll pay over the NUMBER_TOKEN-year term of the mortgage is NUMBER_TOKEN NUMBER_TOKEN pounds that's assuming that the interest rate stays the same now if you over pay by NUMBER_TOKEN pounds each month you'll pay off the mortgage four years eight months early and save thirteen thousand three hundred and eighty three pounds in interest now over that period you would have paid forty six thousand extra into your mortgage to save that thirteen thousand three hundred and eighty three pounds of interest but that's our figure for comparison now let's say you pay that NUMBER_TOKEN pounds per month into a stocks and shares iso and you get a fairly conservative five percent per year return on it after all costs by the way i did a video recently called pension versus isa and i assumed a six percent return in my examples there and i had a ton of comments slagging me off for using an unrealistic return it goes to show just how we really need to improve financial education because these people presumably thought that a cash iso was the only option because they were quoting figures to me of NUMBER_TOKEN a NUMBER_TOKEN return has been achieved by even a bog standard balanced investment fund over the past NUMBER_TOKEN years so i think it's a realistic assumption but this time we're going even more doable with a five percent return and over the NUMBER_TOKEN years four month timeline that you would have paid off your mortgage early your NUMBER_TOKEN NUMBER_TOKEN pounds of total monthly extra investing would have amassed NUMBER_TOKEN
START_INTERACTION_TOKEN before we do that as you're watching this if you find the video useful please do hit the like button and subscribe to the channel it helps the almighty youtube algorithm to put these videos in front of more people so that they can understand their finances better thank you for your END_INTERACTION_TOKEN