mortgage payments V ISA payments

thecaterers

Hi

I have an interest only mortgage and ISA tracker accounts to accumilate the repayment in 17 years. Am i best riding out the stock market storm with these or reduce the payments to a minimum and use the rest to pay off lumps of my mortgage directly. I currently have about 100K equity and a 140K mortgage, It would mean an extra £350 a month payment off my mortgage. I know the answer will be straight forward but at the moment i don't like the idea of payments to ISAs that are not making anything.....

Any help would be great

Liz:eek:

dunstonh

Monthly contributions benefit from times like this. THe units you are buying are 30% lower than last year so you are getting more for your money. If you reduce the payments down until a recovery comes you would have missed out on the lower unit price.

That said, an ISA tracker is not a good investment to use when gearing. The lack of diversification is damaging.

I know the answer will be straight forward but at the moment i don't like the idea of payments to ISAs that are not making anything.....

This is not an unusual event. Bear markets occur on average once every 5 years. On a typical 25 year mortgage term, you would expect at least 5 events like this. Indeed, if your mortgage was 25 years then you already experienced a bear market before this just as you started. This is your second one.

Personally, i am on my third one. This is what happens with equities.

thecaterers

<P>Hi </P>
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<P>Thanks for that reply. I have a 20 year mortgage so this is the first time i have had any experience of this situation.  You say that an ISA tracker is not a good investment in this situation for this purpose,  do you have any advice that could be helpful to keep me on track without making a foolish mistake.</P>
<P> </P>
<P>Thanks</P>
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<P><IMG alt=0 src="http://forums.moneysavingexpert.com/images/smilies/laughing-smiley-014.gif&quot; border=0 smilieid="14"> </P>

Trying_to_be_good

If you don't feel comfortable with the idea of your investments being able to go down as well as up, it may be that your risk profile is better suited to a 'normal' repayment mortgage than an interest only one - then you'd know the capital would be repaid by the end of the term.

Or you could mix and match with some interest only and some repayment.

Don't do something you're uncomfortable with or do not understand!