Overpay or save 31 March 2013 at 7:24AM in Mortgage-free wannabe 3 replies 469 views

steveparfitt

Hi can someone give me some good advice please, i have 14000 left on my mortgage and the rate is 1.75 tracker, i also have isa,s which pay more interest, would it better to pay off the mortgage or save as much as possible until thing change.
Thanks

robedha1

From reading what others say on here I would save in the ISA as the interest rate is better. You'll be better off in the long run. I'm sure someone will come along soon and let us know if I'm right.

QB_Wolf

http://www.moneysavingexpert.com/mortgages/mortgages-vs-savings

RosieTiger

I think you have already answered your own question as this comes up regularly on here anyway.
If you can get a better interest rate on savings than you pay on your mortgage then keep your money.
If its worse pay it off your mortgage.
Ultimately I see them both as savings, but the OP is very much a longer term one in that generally its much harder to get your hands on it (unless your mortgage allows you to take them back)
The smart advice you will see on here is always to have a emergency fund covering 3,6 or 12 months outgoings, depending on how much you feel comfortable with, before you think about doing this.
After that whether you save in an ISA or pay off the mortgage doesn't make a lt of difference. Rate differences if your on a low rate tracker as you say, are pretty marginal.