Adam M

Hi people,

need help and suggestions on how to invest £120k.

Have sold the wife old flat and now have this extra cash.

Have done some comparison figures and it isn't worth paying off the mortgage on our house as there is a 5k penalty for early repayment.

Have decided to pay off 10% a year which is the max allowed (they take CC for this payment so get 1% back on egg each time without losing anything!!!).

Anyway, before anyone says don't sell the flat, the price we have managed to get is about 15k over the expected market value and the respected agent's predictions and it is a cash buyer who will not be getting a survey so the value is irrelevant.

On another note we have to sell this flat within 16 months anyway or will have to pay CGT. Having balanced the effect on the mortgage and the lost rental income against the potential of us getting another buyer at 15k over the market value in 16 months when the market has been pretty flat for the last 4 years, I am defo selling.

so with that out of the way.

anyone know of some excellent safe returns (best I have seen is 4.75%)? Don't need instant access but would like to extract all the money in july 08 to put into the main mortgage, unless of course it is earning more than my mortgage rate at that time after income tax is deducted.

Any ideas greatly appreciated.

Richard_P

I take it your bank won't allow a switch to a current account type mortgage without the early redemption penalty?

That would be the best use of the cash as it's offset against the mortgage but still instantly accessible.

Adam M

it wont allow the switch.

the rate is fixed at 4.91 until july 08 but as I said I can pay off 10% per year on the anniversary of 19th october.

Richard_P

I'd put some of it in one of those guaranteed return accounts where you get at least 2.5% or so but if the ftse index rises you get more.

Are you looking to take any risk at all with any of the money?

Partial deposit on another flat?

Adam M

don't want to take any risk, no need really, just want best reutrn at no risk.

contemplated buying a few buy to lets, but there is hefty capital gains on each and am not sure I want the hassle of being a landlord again.

Richard_P

You could use a letting agency. Saves all the hassle but they do take a percentage for their efforts, means guaranteed rental income though.

Petem95

Bradford and Bingley are paying 4.85% AER for their instant access saver.

You can get about 5.15% AER on fixed rate bonds (over 1-3years), but with it looking likely interest rates will probably rise, then I dont know how much of a good bet these would be - I guess depends how much you put in.

Stock market trackers are where the money is being made at the moment - emerging markets are seeign great returns, but people seem scared of this kind of investment for some reason.

Good job selling the flat for above market value - in a few years time you may look back and see that that was an extremely well-timed move.

XRS

Have a look here http://www.moneyfacts.co.uk/

or here http://www.iii.co.uk/
or here http://www.quote.easy-quote.co.uk/cards/credit_card.asp
or here http://www.fool.co.uk/

HTH