Pay off Mortgages with maturing NS&I Bond

ferneyberger

am retired. I have a NS&I 1 year Guaranteed Income Bond which matures this week. If I renew, the money is tied up for another year at 1.20%.
I also have 3 Interest Only Mortgages. It seems to me, at this juncture, that I would be better served by cashing in the Bond and use the cash to redeem the 3 mortgages……
2.25% 14 years to run
2.45% 12 years to run
2.50% 7 years to run
A good idea ?

bigadaj

Possibly.

With three interest only mortgages are these on buy to let properties as if so then the interest is written off against rent to reduce the tax bill.

The rates you've got on the mortgages are pretty good, and you can put around £80000 or so into current accounts paying between 3% and 5% which might be worthwhile.

An experienced investor would be tempted to put the money into shares as the long run average is around 7-8% though there is risk in this and a coupe, of bad years could be problematic depending on how long you might invest for.