The Mortgage Free in Three - Take 2 challenge (MFiT-T2)

black_taxi_2

only reduced mortgage by £255 feb----jan is a toughest month of year for bills etc

but ive reduced mortgage 20k since the start of MFW

Trying_to_be_good

curlygirl1971 wrote: »

Out of nosey interest.....does anyone leave money in ISA's or add to their ISA pots as well as OP'ing? And if so, why? What's your reasoning if any?

I have fixed rate ISAs that pay more interest than my mortgage rate, do it makes perfect sense in the long and short term. This is the first year I can't (yet) get such a rate so I'm waiting to see if someone launches one, otherwise the money will probably stay in the offset - long-term versus short-term decision to be made!

Jock_Tight

curlygirl1971 wrote: »

Out of nosey interest.....does anyone leave money in ISA's or add to their ISA pots as well as OP'ing? And if so, why? What's your reasoning if any?

I use my ISA allowance each year in additional to my pension to save for retirement, I basically save the allowance/12 each month and dump into a fixed rate ISA each April.I stick to fixed rate ISA's (min 2 years) as these pay more. If you dont use it you lose it.

We have an offset mortgage and as we are 100% offset there is no interest to pay. We have a fixed OP of £475 per month however aim to pay more by saving on bills, shopping, selling items on ebay, Halifax Rewards (x2), coin pots etc.

Its a balance for us, we save and OP.

Thriftyknickers

For us its simply a case of maths. Our cash ISAs are paying a higher rate of interest (between 2.9% - 3.3%) than our mortgage (2.5%) so we simply use us our ISA allowances every year first. I also keep an eye on the rates as most of my ISAs have bonuses which disappear after a year or so. Until I read up on MSE, I didn't realise you could transfer previous year's ISAs! :eek: I keep a small emergency fund with immediate access plus if we're saving for a holiday or something get that tucked away in a best buy instant-ish access account. And then once that's done, I use any spare money to overpay the mortgage. We're lucky though, we have a Nationwide mortgage which means we can draw down on our £40ks worth of overpayments pretty quickly. I've done this a couple of times now when we've needed to replace a car.

Jock_Tight

Februaries mortgage payment now off bringing us down to £10,200 so close to our next major milestone to get below 10k and into single figure thousands :cool:

276 days to go

With regards to the talk about ISA's I have two fixed rate ISA's maturing in March/April and looking to fix (+this years allowance) for a bit longer this time, Halifax 4.3% for 4 years is looking good so far. Some might say dont fix for too long as rates will rise but if we were to fix for just 2 years in the hope rates go up the best we can get is 3.7% then we would need to get at least 5% for the next 2 years (aint going to happen!) to make more than the 4.3% over 4 years.

Maybe_its_because

curlygirl1971 wrote: »

Out of nosey interest.....does anyone leave money in ISA's or add to their ISA pots as well as OP'ing? And if so, why? What's your reasoning if any?

For the record I have about £15k in ISA's and this includes a little that I've put in recently. Now and again I do get tempted to dip in and use some as an OP but i never go through with it :rotfl: I feel like I worked too hard to put it there in the first place. I can't afford to fill my ISA pots and OP so most of the time I OP as I don't really need any more savings......but there again we only get that one chance every tax year to build up that pot for the future. I know many don't have much savings and plough everything into OP's but I'm just not that brave!

Yes, it's a tough one...

I'm in the exact same position as you - £15K in ISAs and having the "save or OP" debate in my head. I figure, £15k is a lot of available cash to have on standby (even if the wrapper has to be taken off it to use it)

BUT... whilst I might've focused on saving in the past, I've just signed up to the MFW 2012 OP challenge. It's not VERY brave as I'm still going to keep my old ISAs, but I'm going to focus on the OPs this year.

Maybe I can be convinced to relieve some of the £15K ISA into the OP....although keeping/growing the ISA makes sense as they're providing better interest than the mortgage is charging (by 0.5-1%).:undecided

I want to see how it feels to watch the mortgage balance (slowly) drop instead of the savings balance (also slowly) rise.

diadeb

Our finances are an eclectic mix and not for the faint hearted as we have a large mortgage but also a lot of investments!

We both have a chunk of cash in fixed ISAs which is our long term cash pot. I save whatever we can into a designated savings pot for the mortgage, count this as offset savings towards our mortgage, and this figure is used in the challenge. I also do small direct overpayments but as our interest rate is currently only 1.49%, it doesn't really make much sense to make large overpayments as we hardly save any interest.

Other than that we try if possible to use our ISA allowance every year, by moving investments from outside of ISAs to within an ISA wrapper. However hubby only has 9 years to go to retirement, so we need to try and shelter as much from the taxman while we can and then release it as necessary to pay off mortgage/help fund retirement if needed.

Kaz2904

We have an ISA each (DH and I) which is pants. I think we're on something like 0.1% at the moment. We have about £3200 in each. We also have some savings (dwindling) in our current account which earns booger all interest but is there for when we need instant access money or for our holiday savings.
Our mortgage is 4.99% still (they're not ever going to bring us lower, this is their SVR) but it's not worthwhile trying to find a cheaper alternative as there isn't one for us now. For this reason, we are continuing with the OP's at the cost of not paying into ISAs.As soon as we pay off the last payment next year, we will start ramping up our ISAs again.
Come next year, DH will be 36 and I will be 35 so we should have enough time to fill them up enough to save for retirement. However, we don't know what's going to happen with jobs so we'll just see what happens as the time rolls around.
If we do ever decide to get a btl then we will look around to get a mortgage which allows ISAs to be offset against the amount owed so that we can reduce the amount of interest charged. Who knows what the likelihood of this is though in this climate.

silver_4444_uk

We have weighed up the risks and make monthly payments into a "Stocks and Shares" ISA and also payments into a West Brom savings account paying 3.1% (the bonus on this is due to end on 31/3/12 so I am looking for another savings account that pays a better rate than the mortgage. At the moment 'Santander online eSaver Issue 4 @ 3.1%' is looking like the account I am going to choose).

We are very fortunate to have a flexible interest only mortgage with Alliance & Leicester (Santander) at a rate of 1.99% (0.99% above base). This mortgage allows us to overpay and withdraw funds whenever we need to. It was originally a repayment mortgage but after much research and feedback from this site we decided to change it to interest only, remove the overpayments and transfer them into savings accounts paying a greater rate than the mortgage.

I hasten to add that the S&S ISAs and the savings accounts are dedicated to the mortgage. And yes before anybody asks, it does take discipline, in NOT TOUCHING it ! The simplest thing to do is set direct debits up, so that as soon as you are paid the money goes into the ISAs and savings accounts. I know that if I left the money in my current account it would "disappear".

I am fully aware that Interest only mortgages and stocks and shares isas will not be to everybodys liking (and I can see the appeal of cash ISAs, repayment mortgages and the certainty of knowing the interest rates ), but over the long term I hope to make a reasonable return, with the help of compounding. As long as the long term return is greater than the mortgage rate then I will be happy.

Hope this helps.

S.

mortgagenomore_2

Cant believe another four(ish) weeks and another check in with amounts then just leaving 3 more

Havent been able to throw as much money in lately as would like but only £1620 off target, fingers crossed this is doable by Dec 12. Well done to eveyone who are still ploughing away 2.1/2 years on