Stooze: Mortgage or ISA

iazcac

Hi,

I have decided to start stoozing and have opened up an M&S card at 15 months 0% and set up a minimum DD.

I now cant work out what is the best thing to do with the cash. Either:

a) Open up a cash ISA and deposit money at c:3% interest

b) Over pay my flexible mortgage. Current balance 95k, paying 1.49% interest.

With either option, I can take my money back when required, but my brain hurts when I try and work out which is the better option!

I spend around £1000 a month on credit cards and have no other credit card debt.

Please let me know your thoughts! Thanks

YorkshireBoy

One of your options will make you 3% AER.

The other will save you 1.49% APR

Now the way I see it is one of the options is over twice as good as the other.

Does that help?

JimmyTheWig

I agree with YorkshireBoy.
All you really need to do is compare the interest rates. ISA is the best route here.

If you get more money than can be paid into an ISA in one year then offsetting the mortgage might be worthwhile. Though depending on your tax position (and that of your spouse, if you have one) you might be better off with a savings account.