Where to save? Halifax / Mortgage / ISA ?

Old_Timer

Best advice required folks.....

I have one of those 1 year Halifax Regular Saver accounts that is paying 12% interest until July 09. I am currently paying £100 per month into the Halifax account.

I also have a Woolwich Tracker mortgage that I am currently overpaying by £300 per month in order to reduce the term.

I also have an ISA that I pay £225 per month into in order to build up a balance to make up an endowment shortfall.

So, given the current financial climate and in view of the short term interest rate available with the Halifax (BTW - I am aware the 12% doesn't apply to the whole final balance as discussed on another thread) I am considering stopping my mortgage overpayments (£300pm) and reducing my ISA contribution to £50 (saving £175pm on current payments) and putting the combined £475 into the Halifax account each month. This would give a revised monthly output of £575 into the Halifax(£475 + the original £100), £50 to the ISA and no mortgage overpayments. At the end of the Halifax offer term in July 2009 I would apportion the balance + interest between the mortgage and the ISA and pay lump sums into the respective mortgage and ISA accounts. There are no limits to the amount I can overpay to the mortgage in one payment and I will be within the £7,000 per annum ISA threshold.

I've played with the maths and projected several options for the possible ISA recovery or even greater fall and I am not convinced I have the numbers right. Does anyone have an opinion on my best options here.

Thanks
OT

opinions4u

The maximum you can put in to the Regular Saver is £500 a month.

I'd pile in to there and reassess the position in July.

Mikeyorks

The 12% (you have £5k in an appropriate Halifax account?) wins.

Whilst Halifax have maintained 10% on the Children's account ever since inception .... I doubt the adult version will continue at that rate, given the current climate. So I would maximise the benefit by putting in as close to the monthly max of £500 as is possible ..... for the remainder of the term.

And - if your anniversary date is mid-month or later - attempt to get a 13th payment in around the 1st of the anniversary month .. as you get 12% on that as well. (Eg anniversary date 20th July. You should be getting your 12th payment in around 1st June. So you can get a 13th payment in around 1st July. All 13 payments + interest will be released into your nominated account on the anniversary date. But don't get too enthusiastic and risk a payment targetted around the 1st .. slipping into the previous month as that could blow the whole account)