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

AdventureRocks

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

ceredigion

Santander 123 account is way down the list of the best interest paying current accounts.

AdventureRocks

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

AdventureRocks wrote: »

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

San only pays 3% on +3k and it is only 2.6% really

AdventureRocks

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

AdventureRocks

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

AdventureRocks wrote: »

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

AdventureRocks wrote: »

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%.

AdventureRocks

Thanks very much forgot to include the £5 in the calculations.

turtlemoose

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.