£5k - into joint mortgage or individual savings account?

Confused_Jo

I have a Norwich Union portfolio bond that has given a dismal, virtual 0% return in the five years it was invested. So at present I don't really miss it or take notice it.
My OH and I both sold our houses and boughtour currrent house e both putting in the capital we made
Me :£54,000
OH:£25, 000
Mortgage:£75, 000 (initial amount borrowed at 5.34% 5 year fixed with C&G which was the best deal at the time 3 years left on it).
Monthly repayments of £460
We have the ability to overpay 10% of the amount annually, as a one off sum.
So if I overpay with my £5k, this may be absorbed into our mortgage.
1. Do I need to get this officially recognised somewhere. Don't get me wrong I trust the OH but people do strange things.
2. Is this money better off paying off our mortgage than going into a saving account?

Thanks for any advice
Jo

Xbigman

As I read it you bought a house for 154k, of which you put in 54k and OH put in 25k. You are asking if you should put more of your money into the house or open an ISA in your name.

If this is right, definately open an ISA.
Regards



X

Stonk

Xbigman wrote:

If this is right, definately open an ISA.

Tosh. It's a straight interest rate comparison. The OP is paying 5.34% on the mortgage; the very best they'll receive net from savings is about 5.2% in a cash ISA. So pay a lump off the mortgage (and get the term reduced, rather than the monthly payment).

frible

Cash ISA's are not the only option. Equity ISA's can give a higher return - but with a higher risk, (my Nationwide equity ISA is up 20% in the last yr). If you were getting a 0% return before, how about trying premium bonds, your capital is 100% safe, and who knows you could win a few pounds.

If you put it into the mortgage, there is always the risk however small that you will lose it all, half to OH and half to the lawyers.

Xbigman

Its a case of the OP protecting her interest in the property not about earning the best returns. With a substantial % of the properties cost having been paid by the OP but only 50% of the equity in her name, she should not put in more money.

Or in terms of the return earned, she only gains half of any mortgage saving but all of any ISA interest earned.
Regards



X