Account that is above mortgage interest rate

Mrs_Optimist

As title says I am looking for an easy access account that pays more than my mortgage interest rate (CURRENTLY 1.45%). We have a lifetime tracker mortgage (repayment) that is .95% above Base Rate. No penalties for overpaying and no restictions either.

I am pretty good with most things money saving but am confessing to being completely hopeless with banks accounts and the interest rates that they charge.

A bit of background; We have 22 years left of our mortgage, the balance of which stands at £75,500. We have already paid off £5000 so far this year. We also have £7500 in savings that attracts no interest. This account is easy access. No other savings, ISA's etc as I find the whole concept of having to move them about when rates change as mind boggling. It is very important that we have an easy access account that we can transfer funds to and from quickly. DH may be out of work soon and so we have refrained from just overpaying the mortgage for the rest of this year as we want to be able to access the money to pay bills etc should his job disappear. Once it has been paid off the mortgage we can't claw it back.

I work and we can cover our outgoings with my wages. We have no debts apart from mortgage and can reasonably save £1500 per month, but again that figure depends on DH keeping his job. We host foreign studenst and throw all that money at the mortgage. I am 37 now and would really like to be mortgage free by the time I am 40! We are on track to have £14,000 saved by end of the year, which in offsetting terms will reduce our mortgage to £61,000.


Can anyone recommend an account where we can earn more interest than our mortgage rate, but can access easily? We have Halifax reward account that my wages goes into that pays £5 per month, and a Alliance & Leicester account that DH's wages go into that covers all bills. I was thinking of opening some more Halifax accounts and claiming £5 which adds to up to £60 per account per year that we can throw at the mortgage. Connected to both accounts are easy access savings accounts but from what I can see we are not being paid any interest if we make a withdrawal, which rather defeats the object of saving!

I thought about posting on bank accounts board, but since this relates directly to becoming MF, hope I am not shot down in flames by posting here.

I would be really interested to know what you folks do.

Sorry for waffling and thanks for reading!:A

uzubairu

There are several instant access savings accounts paying between 2% and 2.8% (some with a few conditions ie linked current account) and several regular savings account paying 4% and 5%.
Some accounts have a bonus payment attached to the rate (usually limited to 12 months) which drops to a c**p rate after a year.

You could put the lump sum into one of these accounts and then feed that money into the regular savings accounts.

We have recently re-mortgaged and our rate will drop from 4.79% to 2.29 (at present BR + 1.79%), so we have opened up several regular savings accounts (x5) and pay £1200 each month.

You could put your lump sum into a high rate instant access account and then feed the regular savings accounts with this money.