Can I have some help with some Maths please

narabanekeater

We owe 100k on our mortgage fixed for another 4.5 years at 5.99%:eek:
I can over pay this 10% a year with no fees
I have 10k in savings. 3k of it is in a ISA and I havent used my ISA allownce at at for this year
I am not a tax payer.
I phoned my mortgage compnay who told me if I paid them the 10k my payments would fall from 640 to 570 a month saving 70 pounds a month or 3780 over whats left of the mortgage.
Or could I do something else with the money for the next 4.5 years then pay off in 4.5 years the 10k and any intrests earnt that will make me more than 3780 on the 4.5 years
Apart from the mortgage we are debt free.

blueberrypie

It's not really a maths question, more a general-managing-savings question.

There isn't much out there offering more than 5.99% right now, unless you want to look at higher-risk investments, so I don't think that stashing the money somewhere else to increase it is the best option.

But it would also not be wise to put all of your savings onto your mortgage - you need to have some of your money available to you for unexpected expenses.

I'd put my rainy-day money into an ISA that allowed me access to it without penalties, and then I'd use the rest to overpay on the mortgage - and I'd ask the mortgage company to keep my monthly payment the same, so that I'd be overpaying by a bit more every month.

Lister_2

From a pure profit level I would say it is better to use the £10k to pay off your mortgage, since you will be saving 5.99% on £10k. To make it worth keeping in savings, your savings would have to return more than that. Clearly at the moment this is a pretty tall order, although who knows what the interest rate will be in 4 years time.

However, it's worth thinking whether that £10k is more useful to you in savings as a rainy day fund. Does you OH work? What would happen if he lost his job?

dimbo61

You are a non tax payer and Barclays have a regular saver paying 6% before tax ( which you dont pay as a non tax payer ! )£250 a month.
Your ISA is not going to be paying any more than 3.61% Barclays, so paying some of this money off the mortgage would be the best to actually save you money, Interest 5.99%! but as others have said you also need an emergency fund with 3/6 months of income.
Can you afford to overpay a little each month and keep the £10k as savings.