Shall I start making capital repayments or invest in this year's cash ISA?

JustAboutThere

Been lurking for awhile and finally am trying to do more with my non-performing endownment.

Property value = c.£200,000
Mortgage balance = £49,500
Currently on variable rate.
Lender - Santander (was Abbey National)
Have already had mis-selling payment of around £6,000.

Based on the following GROWTH as of April 2010 the shortfall will be £26,082 (if 4% growth); £22,482 (if 5.75%) or £18,482 (if 7.5%).

So, I've either been overpaying for some years and/or saving hard.

Question is (and I apologize if I'm in the incorrect forum) - do I start taking money out of savings and making capital repayments or put the money (£5,100) into a cash ISA for this year?

I have two bonds that will mature in May which, when combined, will come to £6,100, so that can also be used. Altogether, there's about £20,000 that could go towards capital repayments. (There's a bit more, but I'm very low-risk and don't want to use all my savings - need to have something in the background as I can't rely on anyone else to bail me out).

I regularly save £600 per month and have no other loans outstanding.

Thoughts (and thanks).

Thrugelmir

Only keep cash in the ISA if it's a better interest rate than you are paying on the mortgage.

magpiecottage

The redress would have been intended to be combined with the surrender value of the policy so you could convert to a repayment mortgage and had the same amount outstanding as if you had taken a repayment mortgage at outset.

This is done because it has been concluded that the endowment mortgage was unsuitable for you. That then begs the question "why do you still have it?" - the more so if you really are as risk averse as you say.

dimbo61

You are paying 4.24% on your mortgage and would be lucky to get over 3% from a cash ISA so provided you have an emergency fund I would overpay the mortgage

JustAboutThere

Thanks guys.