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Keep money in ISA or pay off mortgage
elizabeth_t75
Posts: 3 Newbie
I have £12000 in a cash ISA paying 4.46% gross interest.
My mortgage rate is 5.4% which is a flexible mortgage.
I have worked out that financially it would be worth putting the £12000 into my mortgage and be around £100 better off per annum.
I can get a better ISA at a rate of 5.2% which would mean that I would still be better off by around £30 per annum if I put the £12000 into my mortgage as I would be in a position of paying off my mortgage with the £12k + an couple of overpayments in my mortgage in the next 2-3 months.
I will need around £30k at some point this year eg 6 months to do refurbishments to my home and don't know whether it is wise to pay off my mortgage or move the £12k into a better cash ISA and keep my mortgage going as I can drawdown the £30k as and when I need it with no charges.
Putting the money into my mortgage seem to be the smart thing to do in the short term, however once my mortgage is payed off I will still have a monthly surplus of income which I will need to find a savings mechanism for. Any savings from this will start to be taxed I assume, so does it make sense to still have a mortgage and keep my £12000 in my ISA ?
Your thoughts would be appreciated.
My mortgage rate is 5.4% which is a flexible mortgage.
I have worked out that financially it would be worth putting the £12000 into my mortgage and be around £100 better off per annum.
I can get a better ISA at a rate of 5.2% which would mean that I would still be better off by around £30 per annum if I put the £12000 into my mortgage as I would be in a position of paying off my mortgage with the £12k + an couple of overpayments in my mortgage in the next 2-3 months.
I will need around £30k at some point this year eg 6 months to do refurbishments to my home and don't know whether it is wise to pay off my mortgage or move the £12k into a better cash ISA and keep my mortgage going as I can drawdown the £30k as and when I need it with no charges.
Putting the money into my mortgage seem to be the smart thing to do in the short term, however once my mortgage is payed off I will still have a monthly surplus of income which I will need to find a savings mechanism for. Any savings from this will start to be taxed I assume, so does it make sense to still have a mortgage and keep my £12000 in my ISA ?
Your thoughts would be appreciated.
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