Q: lowish mortgage rate, do I invest lump sum elsewhere?

save-a-lot

Hi

Have a £74,000 mortgage currently on a fixed rate of 4.67% with the Woolwich, and this fix is a 10 year deal that we have only just started - just a few months in. Anyway, an inheritance of £30,000 is imminent and I want to make best use of this money. Would I be right in thinking that with the mortgage rate being so low I could make a better use of the money by placing it in a high interest account? my wife and I are basic tax payers, what high interest savings accounts exceed the 4.67% mortgage rate after tax?? I suppose aswell, the annual ISA allowance could be taken advantage of, my wife and I could pay in the maximum each year for 5 years. So, high interest rate savings account feeding an ISA until all money resides in ISA's.

Is that the best plan???

salthegal

wouldnt mind some advice on this too.

save-a-lot

anyone with guidance on this?

homer_j_3

The general rule of thumb is that you should only invest it if you can accrue more interest than what you are paying on your liabilites. However, these general rules are not always best for everybody and you should take into consideration other factors like exisiting savings, if you are comfortable with your income and expenditure.

its pointless living life on the edge and paying all you have off your mortgage, it could be better to leave a bit for an emergency fund for example or put in a solid investment plan where you can derive an income etc.

I would honestly speak to an IFA who is also regulated to give mortgage advice to give you a full financial review?