Best way to save for home improvements

andreak123

Hello, we would like to do some home improvements in a couple of years when our mortgage is due for renewal. We are likely to spend approximately 40K and ideally we would like to save at least half of this amount or more and take the rest from the mortgage. While we already have some saving, we like to keep some for a rainy day and so my question is - what saving account should we use? ISA or another savings account? We would deposit regularly approximately £800 a month but we can already put some money in the account that would be dedicated to the improvements. I know regular saving accounts only allow smaller amount monthly so not sure what would be an alternative?

Many thanks in advance. 

grumiofoundation

You could open multiple regular savers (3-4 to allow monthly contributions of £800).

Or just transfer the £800 to a savings account/premium bonds each month? 

Unlikely you need to use an ISA to save (unless you will pay tax on savings interest and have already both maxed premium bond allowance).

Thrugelmir

Depending on the interest rate charged on your mortgage. Maybe worth overpaying the mortgage then borrowing the money back when the time is right. 

andreak123

Thanks! Our mortgage rate is currently around 2% but obviously I don’t know what it will be once we are due to renew.