Paying mortgage or save

V3cash

We have been really fortunate to have been left some money so we are looking at paying off mortgage.
however my mortgage interest is lower than savings and I have 2 years left.
interest 2.79%

Redemption about £1400 on mortgage.
i know it is sensible to save the money instead but even if we put max £ into ISA’s we will still then go over threshold and pay tax on savings.
we won’t get money until after April so can’t use the potential 2 lots of ISA’s
each.
i did input figures into martins calculator but I’m not sure if the boxes you tick for tax on interest works as nothing changed  on my results, it said I’d be £250 better off if I saved for a year rather than pay it off.

Veteransaver

Yeah I wouldn't pay off the mortgage until the fix ends due to the early redemption fee..
Unless you end up in the 40% tax bracket then even paying 20% tax on any savings interest outside the ISA should be able to still beat 2.79%
Assume there is 2 of you so you can open an ISA each, there's £40k.
If you are both 40% tax payers then it may be worth seeing how much you can pay off the mortgage without penalty (most allow 10% a year, check the terms)

V3cash

Veteransaver said:

Yeah I wouldn't pay off the mortgage until the fix ends due to the early redemption fee..
Unless you end up in the 40% tax bracket then even paying 20% tax on any savings interest outside the ISA should be able to still beat 2.79%
Assume there is 2 of you so you can open an ISA each, there's £40k.
If you are both 40% tax payers then it may be worth seeing how much you can pay off the mortgage without penalty (most allow 10% a year, check the terms)

Thanks for advice and yes we have factored both of us using our ISA allowance and giving our daughter some money too( have looked into that in detail so understand the inheritance tax gift allowance for later when we pop our clogs)
Overpayment would be an option. It’s just 10% and i have already been overpaying a bit so i will call and see how much is left of allowance.
I have car on finance but it’s 0% so that won’t even be useful either but i will pay that off in February when term ends.
i don’t have other debts apart from 0% credit card so that’s not even worth paying 😕