Pension related question. Maybe to simplistic a question to answer but …
Would you bang all your spare money into clearing your mortgage asap,
Or leave the mortgage payments as they are, go full term, and bang the money into pension pot instead
What’s your opportunity cost, including tax advantages and disadvantages. to each option?
In its simplest form, can you make more investing the pension money than the interest you’re paying on the mortgage after tax and other costs?
Which course of action would make you more comfortable and able to feel good about your decision?
I have a similar, but different, issue. Should I pay off a 3% fixed mortgage or invest the money in an account that can guarantee me more than a 3% return over the same period as the mortgage payments?
I chose the latter option, knowing that if anything were to happen that changed my calculus, I could take the money and pay off the mortgage at any time.
However, in your situation it appears the money would be captured behind a retirement/pension firewall with withdrawal penalties. That’s where you have to consider the opportunity costs, because they may end up being real costs.
I’d invest in the pension and just keep paying the mortgage…as long as it’s not about to dramatically readjust upwards, and I could still sleep well knowing the potential pitfalls of my choice.
Good luck with your decision.