Overpay mortgage or save to earn

Holiholi

I have 2.5 years left on a 5 year fixed mortgage on 0.99% interest (£180k remaining). 

Last year I inherited £100,000 and wonder whether to overpay 10% of the mortgage for the remaining 3 years or whether I’d be better off putting it all in a high interest bank account and earning £ on interest to pay off in bulk when fixed term ends. I currently have it in 2 ISAs and have just gone into the higher rate tax braket.

Grateful for any advice

turbotoaster

I would put £50k into a 5% savings account and £50k into stocks and shares.

Im very similar to you as I have 2.5years left at 1.25% and thats what im doing, ive split it 50/50 as I should be better off overall when im due for mortgage renewal

Newbie_John

Even if you at 40% tax rate then 5% becomes 3%, which is still better than 0.99%.
I'd put £50k into Premium Bond, if you have partner/child then another £50k there - average return is just over 3%, if not then saving account and shift to ISA next year.

I assume you've used your (your partner if you have) ISA allowances.