Saving/mortgage novice please help

Fmr

Hi, I have a mortgage of 87,300 at 4% interest svr. I have £3000 in savings at 0.5% gross.

So I am debating whether to move and borrow more for a bigger house or wait a year and get more money together. Iv always overplayed my mortgage to reduce the amount quicker but am undecided on what's to do best do I ...

Keep the savings as they are and save more

Pay the £3000 off my mortgage and be left at 0 with my savings

Iv looked at fixing my mortgage at 3.99% for 2 years (best rate they will give due to loan to value rate) but they wouldn't lend me the rest without a bigger deposit however we could remortgage elsewhere to borrow more if we wanted to do that 😕 I'm so confused so any help would be great

Thanks

AlanP_2

First point I would make is keep some cash as an emergency fund - Ideally 4-6 months net income dependant on your circumstances.

Protection against redundancy, long term illness and the like.

You say "we" so are you single or is there a partner involved in the mortgage and income picture?

Other dependants?

Plans to start a family?

Age?


It's not meant to be an interrogation, honest, but the more information you give the more relevant Iand helpful) the responses are likely to be.

Fmr

Hi yes I'm married with a 2yr old im 28 and hubby is 30 we are saving £250 pm and overpaying our mortgage by £100. It's very unlikely that either of us will be made redundant anytime soon but I suppose I should take that into account and we would like another child at some point which is the reason we would like to buy a bigger house.

Thanks for replying

P.s we have no debt other than the mortgage

xylophone

You need an emergency fund.

Why not open 1 sole and 1 joint TSB classic plus and set up a standing order on each to transfer £500 a month from one to other and other to one on the same day each month- don't forget to set up for paperless.

http://www.tsb.co.uk/current-accounts/
You can move the interest from the a/c with £2000 to the a/c with one until full....

Have you considered a Santander 123 for your main account?

http://www.santander.co.uk/uk/current-accounts

enthusiasticsaver

I would wait to move and save a bit more as your £3k will soon disappear in moving costs.

Fmr

xylophone wrote: »

You need an emergency fund.

Why not open 1 sole and 1 joint TSB classic plus and set up a standing order on each to transfer £500 a month from one to other and other to one on the same day each month- don't forget to set up for paperless
You can move the interest from the a/c with £2000 to the a/c with one until full....

Have you considered a Santander 123 for your main account?



Please don't think bad of me but.... Iv had the same bank since I was 15 I have no idea about all of this is it easy to switch and would I need to change my bills ect ? I'm great with budgeting money but useless with interest rates ect ��

xylophone

TSB Classic Plus is almost a "no brainer" for the £3000- you wouldn't have to give up your old current account.

You can open one sole account for yourself and one joint account for you and spouse.

You make sure that you have set up both accounts for paperless statements and correspondence.

The account pays interest of £5% on up to £2000.

You might deposit £2000 in your sole account and £1000 in the joint account.

You then set up a standing order for £500 from sole to joint and a standing order for £500 from joint to sole for the same day of the month.

The interest is paid monthly. You move the interest from the joint account to the sole account, thus building it up towards the £2000.

Your husband could set up a sole account and pay the £250 a month into it- you would need to add another £250 a month but this could be simply an in and out by faster payment from your existing bank account.

Once all three accounts are fully funded you move the interest to another interest paying account.

If either of you are non tax payers, don't forget R85.

xylophone

The reason I mentioned the Santander 123 account is because it pays interest of 3% on balances from £3000 to £20,000 and cash back on household bills.

If interested you could use the switching service to switch your existing current account - I am sure that you have at least the required two direct debits?

Read the terms and conditions.

http://www.santander123.co.uk/?cid=ppc-ca-goo-br-santander%20123&gclid=CK6cv8HVmcMCFSvJtAodfUcAcA

Fmr

xylophone wrote: »

TSB Classic Plus is almost a "no brainer" for the £3000- you wouldn't have to give up your old current account.

You can open one sole account for yourself and one joint account for you and spouse.

You make sure that you have set up both accounts for paperless statements and correspondence.

The account pays interest of £5% on up to £2000.

You might deposit £2000 in your sole account and £1000 in the joint account.

You then set up a standing order for £500 from sole to joint and a standing order for £500 from joint to sole for the same day of the month.

The interest is paid monthly. You move the interest from the joint account to the sole account, thus building it up towards the £2000.

Your husband could set up a sole account and pay the £250 a month into it- you would need to add another £250 a month but this could be simply an in and out by faster payment from your existing bank account.

Once all three accounts are fully funded you move the interest to another interest paying account.

If either of you are non tax payers, don't forget R85.

Wow great advise thankyou !

Fmr

If either of you are non tax payers, don't forget R85.[/QUOTE]

May be being thick but what is r85 ? I don't pay tax as I work part time 😐

patanne

R85 allows you to get interest on your accounts without paying tax. Only available if your income is less than your tax allowance and is also available for half of joint accounts. This saves the need to reclaim from HMRC at the end of any tax year. You must remember to canx it if you start earning enough to pay tax!