Cash Isa or mortgage overpayment?

llydaw

we've just finished renovation our house and by Septembers pay cheque will have cleared the debt we have left from this. I will then be in a position to overpay £700pcm off the mortgage, currently on 2 year fixed deal with Co-op at 5.09%. My question is and I know this is probably a no brainer for most but I get very confused, should I pay this overpayment off my mortgage or would I be better putting up to £3600 using the £700 in my isa @6.05% for the 2 years and the remainder of the monthly overpayments after taking into account the £3600 off the mortgage. Once the 2yrs were up I'd then pay the total of £7200 off as a lump sum or should I just pay it all monthly off the mortgage?

I can overpay max 10%pa without penalties.

Look forward to your advice.

tx

dimbo61

first of all find the best rate ISA for this year if you have not already started
one and put £3600 X 2 for both of you ! into that over the next couple of months.
Any extra money you have after filling your ISA,s should be paid off the mortgage.
Dont forget Isa run april to march and the 10% OVERPAYMENT limit each
year is from janurary to december. GOOD LUCK

setmefree2

Ditto what previous poster said - just checking, you have got a pension?

llydaw

thanks, I hadn't though of opening Isa in other half's name, doh!

yes I do have a very good pension through work. Will go through Martin's isa recommendations.

thanks again. Can't wait to be mortgage free.

setmefree2

Good Luck:money: