We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Overpay Mortgage vs ISA
Comments
-
I would say if you can afford it, always fill your ISA allowance each year, because you will never get a chance to save that amount tax free again.Thrugelmir wrote: »Little point in saving money if the interest earnt earns less than you are paying.
But once you do that, the money becomes not available to spend. OP cannot use the money towards the next property without defeating your objective.That's a short term view though. As I say, it depends how much spare money you have. I think filling up the ISA allowance each year is a pretty important thing to do if you can manage it, because you will never be taxed on the interest made from that.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
Martin is not always right, and I think you have taken the advice a little out of context anyway. A lot depends on age. If you are young, there is no point in keeping the money in an ISA for ever - you should make your choice possibly on the net benefit over say 5 years. It may make sense to permanently keep the 6 months emergency money in an ISA. If you are older, it may make sense firstly to ensure the mortgage will be cleared by retirement, secondly to take your fill of ISA and then to overpay the mortgageEven Martin agrees with me :P lol
http://www.moneysavingexpert.com/mortgages/mortgages-vs-savings
Watch out for cash ISAs
Every year, each UK adult is allowed to save up to £5,100 in a cash ISA, which is effectively a tax-free savings account. The fact the interest isn’t taxed means the gain from this usually outweighs or equals the cost of mortgage debt.
Add to that the fact that if you don’t use your ISA allowance each tax year, you lose it; it’s worth filling each year’s ISA up before repaying the mortgage. Though do ensure you’ve got the top cash ISA or it skews the maths.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
I would do a bit of both. Put the most of your savings into the mortgage and then some into your ISA each month.Squish0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.7K Banking & Borrowing
- 254.2K Reduce Debt & Boost Income
- 455.1K Spending & Discounts
- 246.7K Work, Benefits & Business
- 603.2K Mortgages, Homes & Bills
- 178.2K Life & Family
- 260.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards