Keep my ISA - or pay mortgage - advice.

kayleigh

I have a 28k investment with Standard Life - in Standard Life Investments Managed Fund accumulation ISA.

I have a mortgage of 40k on my 160k house.

Would I be best payiny 28k off this mortgage - and with a bit of effort being mortgage free this time next year - or keep the investment and continue paying my mortgage off (I already overpay by 200 quid a month).

My wife and I both work - and don't need to pay off the mortgage - and once we do - will probably just invest the money we used to pay the mortgage with.

I also have 15k in savings and other ISAs which I will keep - just incase I need access to money quickly.

Sillychuckie

if debt is more expensive than money earned from savings (as it undoubtably is)... then pay off the more expensive debt (mortgage).
Just dont leave yourself without any liquid asset (cash) for emergencies if you need it.
say.. 3/4 months salary?
alternatively, use half of it (or whatever you feel comfortable with).
but yes, paying off debt is usually the best idea.
it all depends on the figures, which we dont have.

grumbler

What is your mortgage interest rate?!

kayleigh

It is a RBS flexible choice - which is 6.14%.

The fund has grown at 22% in the last year - might well be time to bail out - unless it likely to continue - which obviously nobody knows.

grumbler

Yes, with stock ISA it is difficult to advise.
However, 6.14% is a very high rate. Didn't you think about changing your mortgage provider? Barlays rate is now just 5.04% on flexible mortgage without application fee... With 5.04% mortgage rate I'd keep the ISA.