We’ve sold our house. We’re moving to a new house which we want to do some fairly extensive remodelling and extension work to.

With that in mind we have taken a 90% mortgage on the new place, allowing us to free up about £200k of equity (minus fees etc) from the old place as our funds for the planned work (it’ll hopefully cost less than that but it seemed sensible to have a reserve. I’ve seen Grand Designs!).

Everyone we have spoken to about this advises that we should live in the new place for at least six months to get a feel for it, learn what works and what we want to change, see where the light falls etc before we start getting an architect in and making plans.

This seems like sound advice, but what the hell do we do with the ~£200k in the meantime till we start needing it?

Short term low-risk investment in something? Leave it in the bank? Stick it onto Premium Bonds?

Obviously we’d like to avoid getting roughly shafted on tax if at all possible.

And unfortunately the missus isn’t too keen on coke and hookers.

I realise this sounds like an obnoxious humble brag thread, but actually it is quite the opposite. I’ve never been in possession of so much money and I have literally no idea what one does once their bank balance exceeds three grand as it is not usually an issue! 🙂

Advice welcome.

Become a slum lord.

TJ can help you get started.

Cryptocurrency.

Either you’ll have no mortgage, or no extension in 6 months.

Withdraw it in cash and roll around naked on the bed in it.

Split it three ways and stick in high interest accounts in different banks. Each account should stay before the £85k compensation limit.

NB By high interest, you might get 0.2% if you’re lucky!

Did you take an offset mortgage? If so then the associated savings account is a good bet for a chunk.

Betting, online betting.

Those adverts on the TV say it’s a fun game, with immediate Cash Out offerings.

You can get £50k of premium bonds each, then I’d put the rest into savings. Probably another £20k each into a cash ISA and the rest into regular savings. Make sure you use different institutions to get your £85k cover. You won’t get much return on any of them but the money is safe and you’ll have easy access. If you don’t spend it all on the building works (lol) then you can decide which is the best one to leave the remainder in. Probably the ISA.

You should return £1000-£1500 on £200k in 6 months, mostly tax fee, so worth doing rather than leaving it in the bank (unless you have an offset mortgage)

Did you take an offset mortgage? If so then the associated savings account is a good bet for a chunk.

6 months isn’t long enough to do anything with it that I could find when in a similar situation.  To get any sort of decent interest rate you need to lock it up for longer than that.  Any investment that could go down as well as up (ie shares of any sort) you need to have some freedom to sell at a good time.

An offset mortgage will “earn” you whatever your repayment rate is tax free  – likely 3%+

You’ve probably got a lot longer than 6 months before you need the money.  Living in a house through a full year will give you a real idea how you use it. Then you’ve got to get an architect and do the design (3 months or more), then planning (3 months? unless it’s under permitted development but thats unlikely if you’re spending 200k), then you’ve got to find a good builder and book in the job. Anyone good will be booked up for at least 6 months ahead.   Likely the actual work won’t start for 18-24months in reality

Whilst 85k is the standard guaranteed deposit limit per registered institution, you can get cover for upto 6mths for £1m under the temporary high balance cover scheme

https://www.fscs.org.uk/what-we-cover/compensation-limits/deposit-limits/

Mate sold his house just before the 2008 crash to rent for a few years and bought gold. Doubled his money within months.

Bought £10k in bitcoin when it was all still a “blockwhat currency?”.

He doesn’t have a mortgage any more.

So, decide what the next big thing is and buy based on that.

Or do what most of us would do and invest it in a safe place that will allow withdraeal in line with your planned spend schedule on the refurb.

Become a slum lord.

Actually considered it – when house hunting we found there are areas nearby (within 5 miles) where we could pick up a 3 bedroom house for £40k!

Did you take an offset mortgage?

Nope, wasn’t an option due to us porting the existing mortgage.

Mate sold his house just before the 2008 crash

Yeah, we bought our first house just before the 2008 crash. 🙁 Took years of overpaying to claw our way out of negative equity. With luck like that I’m not so keen on a short term blockchain gamble!

A dark part of me would like to put it all on black though. Make or break 🙂

 dark part of me would like to put it all on black though. Make or break

Terrible, terrible idea.

Always go red!

I would, but I went black once and now I am unable to go back.

I would, but I went black once and now I am unable to go back.

A ginger friend claims the same for red, but he’s a contrary bugger like that.

Pasenger 57: “Always bet on black”

Depends on whether you would be prepared to take the risk of a loss. If offered the chance of a coin toss between 150k and 300k, as an alternative to your 200k, what would you do? 180k versus 230k? etc. If you can’t stand to lose any of it and/or aren’t really that interested in growing it, put it in the bank (three different banks). If you would like to see it probably grow, but wouldn’t be devastated if you lost some, then invest in shares. I’m also assuming you won’t actually be spending the whole lot in exactly 6 months time but will take a few years over it.

We had a similar situation, and about half as much money as you. We maxed our premium bonds and stuck the rest in a cash ISA.

We were lucky and got about 1.5% back in the 6 months it took to build the place, obviously our holdings reduced considerably over that time.

Didn’t ever get the big one though. 🙁

In six months we will be that much closer to brexit, I would change it into euros pronto and it’ll be 250k sterling  by december. And you’ll be glad you had the cash because your house will be worth **** all.

If you buy ALL the tombola  ticketsat the next Cubs coffee morning you’re GUARANTEED to win. GUARANTEED.

OP. I’m a bit confused why you’re calling this a humblebrag. You’ve borrowed a shitoad of money from a bank and want somewhere to keep it for a few months… where’s the brag? It’s not your money…

Anyway, in reply to your question. The answer is of course an offset mortgage as various people have pointed out. Shouldn’t you have thought this through properly before you remortgaged?

You can get £50k of premium bonds each, then I’d put the rest into savings. Probably another £20k each into a cash ISA and the rest into regular savings. Make sure you use different institutions to get your £85k cover. You won’t get much return on any of them but the money is safe and you’ll have easy access. If you don’t spend it all on the building works (lol) then you can decide which is the best one to leave the remainder in. Probably the ISA.

You should return £1000-£1500 on £200k in 6 months, mostly tax fee, so worth doing rather than leaving it in the bank (unless you have an offset mortgage)

This +1

I’m a bit confused why you’re calling this a humblebrag

I’m deflecting because any thread on here that mentions money gets labelled a #humblebrag. 😃

The answer is of course an offset mortgage as various people have pointed out. Shouldn’t you have thought this through properly before you remortgaged?

As pointed out, an offset mortgage wouldn’t make/save much over six months and wasn’t an option for us anyway as we were porting our existing mortgage to avoid fees, which meant the new mortgage had to be on the same basis.

Mate sold his house just before the 2008 crash to rent for a few years and bought gold. Doubled his money within months.

The historical price of gold is fairly well documented.

And your mate’s story sounds like a pub brag gone a bit far 😉

Take out loads of pay day loans

McLaren 720S.

Ask an IFA about prudential international bond.
We have one that has returned 7% every year since 2014 when we set it up.

Pay off your mortgage.

Actually, why on earth have you taken out a mortgage now rather than in 6 months time?

Avoid Cash ISAs. They pay bugger all.

Put it in NS&I accounts, I forget which, but they pay 1%, and you’re allowed £1k pa tax free in interest.

NS&I, your whole investment is covered, not just restricted to £75k. You can access it within a couple of days.

buy a smaller house, stop watching grand designs, sell the bigger hoose and actually spend the money instead of kidding on you are going to? 😆

Actually, why on earth have you taken out a mortgage now rather than in 6 months time?

Because the house we want is for sale now, not in 6 months time?

The mortgage is fixed for 2 years at 2.39% – not fantastic, but not terrible for a 90% LTV.
At the end of that period we will hopefully be in a position to get the house revalued post-extension(s) which will hopefully lower the LTV.

buy a smaller house, stop watching grand designs, sell the bigger hoose

Funnily enough the house we have bought is smaller than the house we are selling, BUT it has enough garden space to make it into the larger 4-bed house we want/need for the future (and more importantly a proper garage/manshed for me). That’s why we needed the equity.

sell the bigger hoos

Clearly exposed as Scottish and therefore any advice based on Spending is not to be trusted.

Avoid Cash ISAs. They pay bugger all.

Put it in NS&I accounts, I forget which, but they pay 1%

You’ll get 1.3% on a cash isa. Not brilliant admittedly but still more than 1% and a nice little bonus in 6 months. For long term I’d go with a stocks and shares isa but that’s not what the op wants. If rates do rise and the op has money left an isa is a reasonable place to have some money.

“You’ll get 1.3% on a cash isa.”

Where?

Normally a good range of deals available here https://www.moneysavingexpert.com/savings/best-cash-isa

You need to keep an eye on it as the rates often drop after a year but it’s easy to move it to another, better one

Nationwide

Oh Yes…