Do i move money from isa to pay off mortgage?

dean_ham

Hi,

Im a FTB and will be looking to buy a home when prices come down to reasonable levels...

My parents are telling me to put down as much money as i can when buying a house but i disagree with them.

I have built up £9000+ in the last 3-4 years in my isa's, and im also looking to fill up my £3600 allowance this year ASAP. Meaning i have £13kish in my ISA account earning 6.5% interest.

But i also have savings in my internet e-saver accounts which totals to roughly £15,000.
My thinking was to use £10,000 for a deposit on a £80,000-£100,000 mortgage and the other £5,000 on fees+starting me off etc etc. The mortgage will be on a low rate of something like 5.5% so whats the point of moving my isa money which is earning 6.5% ?
Also this ISA money is a safety net where if i am in desperate need of cash for whatever reason i can dip into that....

Do i listen to my parents and put in as much money as i can to pay off the mortgage?

Cheers

Dean

jules73_2

Hi

It depends. You may need to put the money towards you mortgage depending on what deals are around at the time based on LTV.

I do what you are suggesting because I have 50% LTV and I have a low mortgage deal at the moment.
When I come to remortgaging, I may use my savings to put towards my mortgage depending on what the rates are at the time.

Swings and roundabouts really.

neas

assuming your mortgage is on a low rate of 5.5%... could be hiher rate than your isa then... THEN it would be wiser to take all funds and put it into Mortgage

Depends on your circumstances... Also a higher deposit yields better 5 year period rates... might save you some dosh.