We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Savings v. mortgage...?
frivolous_fay
Posts: 13,302 Forumite
Sorry all, my head's buzzing and I've spent long enough looking at percentages for them to stop making sense to me.
We've just taken on a mortgage, but we have also gained some lumps sums (could have done with them before we took on the mortgage!) and anticipate some more. (£10k floating right now, hopefully another £20-30k more to come)
The main question... taking into consideration the basic rate of tax, what percentage interest would a savings account need to generate on £10k in order to beat the efficiency of the same amount ploughed into a mortgage currently fixed at 5.34%?
My highest rate account atm is the ICICI HiSave.
TIA
We've just taken on a mortgage, but we have also gained some lumps sums (could have done with them before we took on the mortgage!) and anticipate some more. (£10k floating right now, hopefully another £20-30k more to come)
The main question... taking into consideration the basic rate of tax, what percentage interest would a savings account need to generate on £10k in order to beat the efficiency of the same amount ploughed into a mortgage currently fixed at 5.34%?
My highest rate account atm is the ICICI HiSave.
TIA
My TV is broken! 
Edit: refunded £515 for TV 1.5 years out of warranty - thank you Sale of Goods Act! :j
Edit: refunded £515 for TV 1.5 years out of warranty - thank you Sale of Goods Act! :j
0
Comments
-
you would need to earn more than 6.675% gross in order for you to get more than 5.34% net on your savings
hope thats helpful0 -
I hope you have or will max out your ISA's. You can compare your mortgage APR directly with the AER for a mini cash ISA. Most good ISA's easily beat your mortgage rate.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0
-
Pay the mortgage... I've been fishing around on high interest accounts... I've more or less got the lot...
However, merely upping my mortgage payments by about 25 pounds and I received a letter from the bank saying I've just saved almost 3k, on the total amount..
We're talking a couple of hundred quid in monthly savers and the same over a year in a high interest account...
Fiddling around with all the monthly savers, puts you in a head spin... I'm doing a lump sum off the mortgage next time. One payment and you save thousands...0 -
It's pretty simple. If the net rate on the savings exceeds the mortgage rate then keep the savings.Happy chappy0
-
frivolous_fay wrote: »We've just taken on a mortgage, but we have also gained some lumps sums (could have done with them before we took on the mortgage!) and anticipate some more. (£10k floating right now, hopefully another £20-30k more to come)
The main question... taking into consideration the basic rate of tax,...
presumably, with £50k in lump sums you would no longer be a basic rate tax payer though.0 -
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.8K Banking & Borrowing
- 253.8K Reduce Debt & Boost Income
- 454.6K Spending & Discounts
- 245.8K Work, Benefits & Business
- 601.9K Mortgages, Homes & Bills
- 177.7K Life & Family
- 259.7K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards