mortgage or ISA

ronald208

Hi I have a tracker interest only mortgage with the Halifax of £46000. I
started a PEP, now an ISA, in June 1998 for £50 a month with Jupiter, to save for my retirement as my then work stopped my pension. I was made redundant in 1999 but still managed to keep up all my payments etc. I am now working in a low paid job with just enough each month to keep my head above water. I will be 59 next month(Oct)

My first endowment matures in 6 years(I have 4) and all of them may not pay
the required amount. It was suggested to me that instead of paying £50 per
month into a Jupiter ISA (£4250 paid in now worth £5100 approx over 85 months) I would be better paying that £50 into my mortgage account every
month so that I will end up paying less interest, also the amount I will have
to pay on my mortgage will be reduced by £3600 or £9000 approx. There are no penalties for paying money into my mortgage account as I found out when I went to college as a mature student and they gave me £750 towards my rent/mortgage. This means that my actual mortgage is now approx £750 less i.e. on my latest letter saying the interest rate is being reduced they have it at £45,397.

So the question is, do I continue as I am, or take the money out of my ISA
and put it, along with the £50 per month, into my mortgage account for the
next 6 years and hope that my endowments will then pay the mortgage and have enough extra to help towards my retirement?

Thanks Ron

dunstonh

Depends on your attitude to investment risk. The ISA has the potential to perform better than the interest you pay on your mortgage. You appear to accept that investment risk so you could keep with it. The stockmarket is expected to perform around 8-9% p.a. for the next few years (that really means analysists are guessing but its as good as you are going to get ). So the potential is there but its a personal choice.

Your personal circumstances are perhaps not great to be speculating but you know your situation better than us. Perhaps it would be better to get the endowments reviewed to see if alternative options (or even a fund switch) may offer better value for you.