Mortgage or ISA???

waterrat · 23 March 2006 at 11:48PM

mortgage free please

Help!
Do i save or do i get rid of the mortgage?

Mortgage tracker due to finish 4 years 4 months
amount still owing £13,000.00 ish
no early repayment charges

Savings.
£20,110.00 in cash ISA
£11,500.00 in FTSE 100 tracking ISA

we are still quite young 44 and 42 with two children 19 and 16
would like to rid ourselves of this debt
no other real debts to speak of
advice please
also will get the family a debt pig asap !

Queen_of_Hearts · 4 April 2006 at 6:01AM

Useful question, I have been debating the same. Between me and partner we have at least 6 years of ISA and little less than half the mortgage to be paid.

Whilst I think it is better to liquidate the ISA and pay off good part of the Mortgage, my partner thinks it would be wasting tax free savings over a potentially taxable property, hence the dilemma.

We could have had better response on the pure money thread where people invest, save, advise and have advice.

roswell · 4 April 2006 at 8:43AM

well i cant really say much but im going to offset my ISA shortly instead of pay off my morage it will effectively give me a 0% morgage with reducing capital, although I will have 100% of my morgage covered I still need an emergancy fund so have chosen this route rightly or wrongly it will also allow me cheap borrowing till the emergancy fund is in place.

Joe_Bloggs · 4 April 2006 at 11:29AM

@waterrat
It is difficult to do the number crunching when the interest rates are unknown. Perhaps you can contribute to an ISA and fill this years allowance whilst making small but persistant overpayments to reduce the term of your mortgage. The treasury is so stingy at handing out £3K cash isa limits that it may make sense to hold on to what you have earned. Check out the latest ISA news in the ISA/ToIsa section of the savings and investment board here.
J_B.

Mortgage or ISA???

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