Pay down mortgage or invest in an ISA?

MM1943

Hello Everyone,
I have fixed mortgage with an offset facility fixed at 1.84% until feb 2025. The mortgage is £200,000 and the money in the offset is circa £100,000, currently im reducing the term by using the offset savings.
My question is, should i invest the offset savings in to a stocks and shares Isa instead (with the S&P 500 paying about 29% today, although apprecaite its high the average over its existance is circa 10%) rather than stick with the helpful, but low interest of the offset?
I don't need the savings urgently, but want to save/make the most money
Thanks

Mark_d

By using your 100k as offset savings, you're effectively earning 1.84% interest on it.  This is a very poor rate of return as some cash ISAs/savings accounts are offering over 5%.

Would you be happy paying 5% interest on your 200k mortgage at the end of your fixed rate, or would you want to partially-repay the mortgage - perhaps to get a better LTV and lower interest rate?  Any money to be used for a partial repayment should be kept in a cash account.

I tend to target a 10% average rate of return on my investment portfolio so as long as my cashflow can comfortably accommodate the increased mortgage repayment, I would put savings into a stocks & shares ISA.

edinburgher

What do you mean the S&P 500 is "paying" 29%? You do understand it's not like a savings account, right? I remember the GFC and investments paying -45%