A little help please????

everton09

Hi, I have just started a ten year fixed rate offset mortgage with first direct at 5.49% and owe £80000, which I am happy with, My problem is: I have £6000 saved and its in an account paying 5.5% tax free, I also have a home improvement loan which I took out a while ago with Northern Rock, of £6000 and the interest rate is 5.5%. It has 8 and a half years left and im paying £70 a month. My mortgage offset rate is 6.25% on current account , savings etc. So do I

a)offset the £6000 on the mortgage

b)pay off the loan to Northern Rock and overpay the £70 a month to my mortgage.

or

c)keep the £6000 in a higher interest rate savings account, isa etc????

Please help.

JoeK_3

everton09 wrote: »

Hi, I have just started a ten year fixed rate offset mortgage with first direct at 5.49% and owe £80000, which I am happy with, My problem is: I have £6000 saved and its in an account paying 5.5% tax free, I also have a home improvement loan which I took out a while ago with Northern Rock, of £6000 and the interest rate is 5.5%. It has 8 and a half years left and im paying £70 a month. My mortgage offset rate is 6.25% on current account , savings etc. So do I

a)offset the £6000 on the mortgage

b)pay off the loan to Northern Rock and overpay the £70 a month to my mortgage.

or

c)keep the £6000 in a higher interest rate savings account, isa etc????

Please help.

Assuming that you only have the £6,000 savings I would class that as rainy day money, just in case of emergencies. If this is the case, the last thing that you would want to do is to get rid of it.

Offsetting it looks favourable!

JoeK