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If i can get interest rate higher than my mortgage should i overpay or save?

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my mortgage is .14% and Santander have a 3% current account (ignoring tax as it will be going in a few months).

So would this mean i am only paying 0.14% on my mortgage loan so it is better to save the money and earn interest because it is a very very cheap loan?

Any help appreciated as always

Thank you

Comments

  • ceredigion
    ceredigion Posts: 3,709 Forumite
    Eighth Anniversary 1,000 Posts Photogenic
    Santander 123 account is way down the list of the best interest paying current accounts.
  • ceredigion wrote: »
    Santander 123 account is way down the list of the best interest paying current accounts.

    Bu most have a lower cap than £20k so will only pay interest up to 3k for example..
  • ceredigion
    ceredigion Posts: 3,709 Forumite
    Eighth Anniversary 1,000 Posts Photogenic
    Bu most have a lower cap than £20k so will only pay interest up to 3k for example..



    who said you can only have one
  • ceredigion
    ceredigion Posts: 3,709 Forumite
    Eighth Anniversary 1,000 Posts Photogenic
    San only pays 3% on +3k and it is only 2.6% really
  • ceredigion wrote: »
    who said you can only have one

    I guess but they all need two direct debits coming out i only have two :rotfl:i will look into it though :)
  • ceredigion wrote: »
    San only pays 3% on +3k and it is only 2.6% really

    when the new tax rules come in i will be 3% though.

    is my logic right that i would only have a loan for 0.14% in effect as i am offsetting i against the interest earnt in the current account?

    thank you very much for all your help :beer:
  • ceredigion
    ceredigion Posts: 3,709 Forumite
    Eighth Anniversary 1,000 Posts Photogenic
    I guess but they all need two direct debits coming out i only have two :rotfl:i will look into it though :)


    With regard to DD's, they don't ALL need some, and if you are cute it is possible to pay yourself By a DD.
  • ceredigion
    ceredigion Posts: 3,709 Forumite
    Eighth Anniversary 1,000 Posts Photogenic
    when the new tax rules come in i will be 3% though.

    is my logic right that i would only have a loan for 0.14% in effect as i am offsetting i against the interest earnt in the current account?

    thank you very much for all your help :beer:
    Yes you are in effect off setting the mortgage.
    When you take the £5 per month fee (san123) in to account the return on 20k is 2.6%.
  • Thanks very much forgot to include the £5 in the calculations.
  • this site here very easily shows you what mix of current accounts to get (and how many DDs are needed if any) to maximise interest.
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