Can anyone spot a problem with this savings plan?

Jevvers

Hi all
We are about to take a lump sum out of our mortgage and put it in savings accounts which even after tax will earn more than we are paying. Please can anyone see a problem with the following?

Borrow 18900 from Santander flexi mortgage @ 0.49 above BOE base = 0.99%

Put into PO easy access at 3.17%
Drip feed into the following until we have to cut to minimum
£300pm. FD @ 8%
£250pm HSBC & 6%
2x £1000pm Monmouthshire @ 4%

Reckon the net interest in one year will be approx £650 + £60 from blipping £1k into Halifax each month.

Any thOughts or advice or warnings gratefully received.

Joe_Bloggs

This looks like a cunning plan. I suppose the key is Santander saying yes to the £18.9K
J_B.

Jevvers

Thanks yes it's a fully flexible mortgage so we can take money out as it's the difference between our limit and what we have left to pay (ie it's the amount of capital we've paid off so far).

calypso_rhapsody

Look at Santander Esaver 5 paying 3.2% instead of post office? Just done the sums on the Monmouthshire product v leaving money in Santander - works out at £38.40 net over the year ... not sure i can be bothered!

Jevvers

Thanks, why isn't the e-saver top of MSE best buys when the rate is better than the PO?:undecided

I think I can still be bothered with Monmouthshire as we can each save £1000pm so it does work ouRt as quite a bit more.

Ifts

Jevvers wrote: »

Thanks, why isn't the e-saver top of MSE best buys when the rate is better than the PO?:undecided

Give em a chance, the new eSaver 5 rate only came into effect today.
I'm sure MSE will update soon.

kidmugsy

It's worth having a look for tracker Cash ISAs that pay base rate +2%. +2.5% or whatever. Then if you transfer your ISAs into one of those it will give you a nice profit whatever happens to the base rate.

Jevvers

Oh I see I didn't know it was new! I thought maybe there was some drawback with it that was keeping it off the top. Monmouthshire never appears in the Regular Savers section either and I'm not sure why.

calypso_rhapsody

The Santander ESaver has only one possible downside that i am aware of - and that is that the bonus is variable so could be changed ... in practice i am not aware that they have ever done this with previous issues (I think i have held 3 of the 4 previous issues).

There are some that would say that fact that it is with Santander is a downside but i don't necessarily agree, not having had a problem.

Am sure it will be on the top savings accounts list by Monday but the rate was only increased today.

Jevvers

Thanks for the tip-off Calypso, I would rather go for Santander as they seem to be more set up to deal with things like faster payments than the PO is. Could be important if we're going to be moving money around a lot.

nomorekids

there's nothing wrong with your plan, we do this all the time with our Santander flexi morgage, only I am basic rate tax payer and our rate is 1.49%.

Monday, I'll be requesting £20,000 (our limit) and be putting it in the Santander issue 5.

Works out at a net gain of ((3.2 * 0.8) - 1.49) % x 20,000 = £214 per year gain for doing nothing.

I like you will be drip feeding into Norwich and Peterborough family saver and Skipton regular saver both at 5% for extra profit.

Don't you just luv flexi mortgages?