Using mortgage for savings... bit complicated!

enthusiasticsaver

If the savings rates you can get are higher than the mortgage then it makes sense to keep the money your mum has gifted you as a PET set aside earning interest rather than repay  the mortgage. 

Has she specifically given you that to repay the mortgage and will she be cross if you do not do that? Surely if you have a 5 year term the mortgage will be repaid by monthly repayments by the end or do you mean you have a 5 year fixed rate mortgage (not the same thing). 

Don't forget the tax which may be liable on the interest as said above. 

IamWood

Thank you @ringding.

I have asked a similar question at https://forums.moneysavingexpert.com/discussion/6364643/would-you-take-this-mortgage-offer-and-invest-the-fund-250k-5-year-fixed-rate-1-54#latest.

My bank called me today asking me to make a firm decision as the offer expires next week.

ringding

enthusiasticsaver said:

If the savings rates you can get are higher than the mortgage then it makes sense to keep the money your mum has gifted you as a PET set aside earning interest rather than repay  the mortgage. 

Has she specifically given you that to repay the mortgage and will she be cross if you do not do that? Surely if you have a 5 year term the mortgage will be repaid by monthly repayments by the end or do you mean you have a 5 year fixed rate mortgage (not the same thing). 

Don't forget the tax which may be liable on the interest as said above. 

She's fine with us doing it. 
I used the wrong terminology didnt' I! The mortgage was arranged on a 19yr term, it's a 5yr fixed arrangement with TSB (still not sure if the terminology is right but you know what I mean).