Mortgage v Savings-again!
conker_3
Posts: 7 Forumite
My first question!
As I don't think you can get a standard answer to this question I thought I would put my individual case to the experts amongst you.
I'm 55, have £60,000 in savings (ING and ISAs) and live with a partner who has the mortgage for our house and for which we owe £58,000. The fixed rate is ending in December and we will obviously have to have a higher interest rate. We both work and are standard rate tax payers. We would have no problem in saving money during the next year for the proverbial rainy days, so: should we pay off the mortgage or not?
As a subsidiary: would we be better off married? Joint owners? etc
Many thanks.
As I don't think you can get a standard answer to this question I thought I would put my individual case to the experts amongst you.
I'm 55, have £60,000 in savings (ING and ISAs) and live with a partner who has the mortgage for our house and for which we owe £58,000. The fixed rate is ending in December and we will obviously have to have a higher interest rate. We both work and are standard rate tax payers. We would have no problem in saving money during the next year for the proverbial rainy days, so: should we pay off the mortgage or not?
As a subsidiary: would we be better off married? Joint owners? etc
Many thanks.
No reliance should be placed on the above.
0
Comments
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Compare tax-free return on savings vs. interest rate you can get on mortgage. If savings earns a higher rate, keep savings. If not, pay mortgage.
For example, right now you can get 5.5% at cahoot. After tax, that is 4.4%, so you would have to have a mortgage that charges less than 4.4% interest to make it worth keeping savings.
You can get 5.1% on an ISA right now, I believe. So if you get a mortgage for less than that, you would want to keep your ISAs.
It may be that you will want to keep your ISAs but use your savings to greatly reduce the mortgage. In other words, there is a middle option as well. But it is simply a matter of comparing percentage rates (after tax, in the case of non-ISA savings).I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.
If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.
Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?0
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