Whats the best saving for me

garry82

I have a 55k mortgage over 25 years intrest rate is 4.6%. I earn 2k a month what am i best doing paying cash in to my mortgage or paying into isa's and the money fountain idea. Some help please. ;D( I have just started the sainsburys credit card 12 months 0%)

Reaper

It's simple - just see how much you pay in interest on your mortage and compare it to what you could earn in interest in an ISA.

In this case you are paying 4.6% but could earn 5.35% with an Abbey postal ISA, so you are better off putting it in an ISA.

If the interest rate on your mortgage goes up in the future so it is higher than your ISA then it is time to cash it in and put it plus future money towards your mortgage.

However you might want to keep a bit of money in the ISA for that "rainy day" as once it goes into your mortgage it can't come back out again.

For this explanation I have assumed there are no fees for overpaying the mortgage and that it is a standard repayment.

deemy2004

is your mortgage rate fixed ?

If so for how long ?

If you have a lump sum you could fix it in a cash-isa for a higher rate for the duration of your mortgage fix term, to maximise interest.