Isa or overpay on mortgage , 8 December 2022 at 10:39PM in Savings & investments 9 replies 621 views

michno8

Hi , I have a chunk of money after a recent house sale . I was going to put it in an isa but think it may be better to pay a lot off my partners btl and change what they have left to pay into a repayment mortgage . The mortgage has 11 years  to run and we would be left with £20000 if I  was  to put £30000 . What are peoples views on this please.  

MX5huggy

You don’t give enough information to but I would be putting as much as possible into pension. Here’s why:- https://youtu.be/MWadHLKMgB4

bostonerimus

MX5huggy said:

You don’t give enough information to but I would be putting as much as possible into pension. Here’s why:- https://youtu.be/MWadHLKMgB4

Yep, not really enough to go on from the OP, but I will say that it doesn't have to be one thing or the other...you can split the money and do both.

Albermarle

This question gets asked regularly. The answer depends on a few different factors, such as the mortgage interest rate, the time scale involved, your other assets/savings, pension provision, family and employment situation etc.

Although the usual end answer is to spread the money around. Mortgage overpayment. pension lump sum, savings account, S&S ISA etc 

jimjames

If mortgage rate is below 3% then it wouldnt seem to be a financially good decision to pay off mortgage when you can get that from a cash ISA.

dunstonh

I was going to put it in an isa but think it may be better to pay a lot off my partners btl and change what they have left to pay into a repayment mortgage .

More commonly, it is asked whether you should pay into the pension or the mortgage rather than an ISA.   Partly as the pension wrapper is more efficient than the ISA wrapper as long as the money is remaining to 58+

michno8

Thankyou for your replies.  We have no mortgage on our own home . No debts or credit cards etc . In our 50s . Unfortunately both had to retire from work on Ill health but both have paid full stamp for state benefit when we reach retirement age.   Claim contribution based benefit, which we get by on . Mortgage is an interest only one . 11 years to run and not in any deal so goes with rate . Paying approx £2500 a year interest . 

WYSPECIAL

Will your money be safe if you and you partner split up or are you effectively gifting them a large chunk of money?

michno8

Nothing in writing , but I trust that they would do the right thing if we split . 

FreedomBringsPeace

michno8 said:

Nothing in writing , but I trust that they would do the right thing if we split . 

If they are upright and just why not sort this arrangement formally? Verbal agreement leave alot of grey areas