4.29% fixed 2 years ? Shd I use Isa Money

Jasmin

My offer on the house I relly like has finally been accepted and now am in dilema.

I have a found a good mortgage rate 4.29 % fixed for two years but have a question.

Should I put my taxfree savings down as deposit and take out a £85000 (45%) mortagage or should I keep my tax free savings i.e Isa and Tessa and increase my mortage by £20000? I am a high Tax rate payer and decalring savings I seem to give more back to the taxman.

I will be very grateful for advise as am not sure waht to do?

Froggitt

Presumably your ISA rate is about 4.75% tax free.

Half a percent on £20K is £100 so thats all youre talking about by keeping the cash in the ISA.

Its down to personal preference......might you blow the savings on a whopping plasma so you end up with the higher mortgage and no savings or interest? If so, go for the smaller mortgage and forego the £100......if youre disciplined, take the higher mortgage, and review the situation at the end of the two year offer when prevailing rates may be different (eg you dont say if youre tied in the the SVR for a period of time).

tomstickland

I replied in the other thread. The same as above. If you have a 5% ISA tax free then you are better off keeping the ISA since you are gaining 0.7% per year.
I'm in the same position myself - I have £3K in a cash ISA and I could remove it to increase the deposit, but I'm going to keep it.

michaels

I would say definitely keep the ISA as once it is gone you can't get it back and you are actually making on the deal at current interest rates :-)

zag2me

I was in exactly the same position with my ISA and buying a hosue. I chose to keep the ISA and only put down a 5k deposit. It also means my isa continues to grow and I have some spare cash if I ever loose my job or want to take some time off. Being disiplined isnt really a problem as an ISA is very valuable and I wouldnt go spending that on a new plasma