Mortgage and ISA

Jono

Hi All,

I've currently got a offset mortgage with the One Account (5.6%) and have several mini ISA's with the Beverley BS (4.85%) which total over a third of the mortgage value.

My idea for the ISA's was to help with my retirement (I'm only 31) - my question is, should I use the ISA to pay off part of my mortgage?

I appreciate the tax free implecations of my ISA, but is it better to reduce my mortgage?

Joe_Bloggs

The reason you are tempted to trade in your ISAs is the poor rate of the One Account and not the good rate of your ISAs. Were your mortgage less than 4.85% then you would not be tempted. There are better value offsets out there !

Jono

Hi Joe,

Yes, it is the interest rate difference that has got me thinking. However, if I do cash in my ISA, my mortgage will be about £25K. If I move to another lender, I'll have legal and other fees to pay again (this becomes a larger percentage as the mortgage decreases). I wounder if it's worth "discussing" it with the One Account people?

Joe_Bloggs

Go for a fees free deal then. How much do you really offset the mortgage you have at he moment ? Why burn hard earned tax allowances to make a poor rate palatable ?
J_B. (The One Account are owned by The Royal Bank of Scotland.)

Hobo_2

There is of course the "IF" offset mtg, where you can transfer your cash ISA and use it too offset, only they do this feature.

jono_3-2_2

We are just sorting out a mortgage at 4.78% fixed and have ISAs paying 4.90%.

Why pay virgin over 1%?

Jono

Thanks for all the replies. I'll have a look around (the IF one looks good for "keeping" my ISA's - but i bet they don't do a fee free deal!) and a phone call to the One Account to see if they'll budge.

Time for a bit more research.

P.S. It's good to know there's another jono out there...