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Thread: Mortgage and ISA,s

  1. #1
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    Default Mortgage and ISA,s

    Well I got my interest on 1 of my ISA,s and it gave me back a staggering £22 interest on £10k

    So I have hunted around and found another ISA that will pay 2.5% guranteed for the first year

    I then decided to ask my mortgage company if I can pay an extra £5k off my mortgage to which they replied yes no problem and it will lower your montly installments by £30 PCM

    So basically I can save £360 a year by paying £5k off my mortgage or earn £11 tax free if I left 5k in my old ISA.

    Another government rip off to make us believe we are saving money "tax free"?

    Just thought I,d mention it as I have told a few mates who have done the same now but you need to check you do not have any early repayment fee,s before you pay anything off.

    Also I,m paying double my mortgage payments at the moment as the rates are so low and that has made a huge impact on my loan term. Might as well make the most of it because it is evident not getting a huge return on our savings!

  2. #2
    Ex Vec-C Admin ed taylor's Avatar
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    I did this sort of thing with my Mortgage and paid it off early, many years ago.

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    I think at the moment with interest rates so low its the way to go. I,m still paying what was the maximum mortgage payment 18mths ago and thought I may as well carry on paying that out and it is basically doubling my mortgage payment per month as of now. I know quite a few of the guys at work are doing that

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    Ex Vec-C Admin ed taylor's Avatar
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    Yes. I think it is the best move too. The more you can take off your Mortgage the sooner you will pay it off.

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    Quote Originally Posted by the_wave_rider View Post
    Well I got my interest on 1 of my ISA,s and it gave me back a staggering £22 interest on £10k
    I would make formal complaint about that to the FSA, depending on the type of ISA and the sales material
    Even a basic ISA should have returned between 1% and 3%, not 0.2%

    I agree, money is better invested in mortgages at the moment to pay off the capital, rather than poor investment rates
    I noted someone a few months ago was paying just £18 per month for their mortgage, then I explained they had an interest only and why not keep paying what they were before so that the capital is paid off
    That way when interest go back up (which they will eventually) the repayments with interest will not be so high

  6. #6
    Regular Member 67688c's Avatar
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    Quote Originally Posted by the_wave_rider View Post
    Well I got my interest on 1 of my ISA,s and it gave me back a staggering £22 interest on £10k

    So I have hunted around and found another ISA that will pay 2.5% guranteed for the first year

    I then decided to ask my mortgage company if I can pay an extra £5k off my mortgage to which they replied yes no problem and it will lower your montly installments by £30 PCM

    So basically I can save £360 a year by paying £5k off my mortgage or earn £11 tax free if I left 5k in my old ISA.

    Another government rip off to make us believe we are saving money "tax free"?

    Just thought I,d mention it as I have told a few mates who have done the same now but you need to check you do not have any early repayment fee,s before you pay anything off.

    Also I,m paying double my mortgage payments at the moment as the rates are so low and that has made a huge impact on my loan term. Might as well make the most of it because it is evident not getting a huge return on our savings!

    Some returns on ISA's are really pathetic, and not worth bothering with at all. However there are some deals around which do give between 3 and 4%. My wife and I have ISA Plus accounts with RBS which return 3.51% and received several hundred pounds in interest last week. However RBS no longer do those ISA's though they are obligated to continue them for existing customers. I believe their current deals are around 3%, though obviously the larger the amount the higher the return.

    £22 return on 10k is indeed shocking, and obviously agree it needs to be moved somewhere else, TBH I find it almost unbelievable. There are certainly better deals out there, though as you still have a mortgage, maybe reducing it a little AYS may be the best bet.

    I was in a similar position about 3 yrs ago, where I had around 85k saved in a Halifax Web saver account, and the rates just dropped and dropped to the point it was barely worth the effort.

    We were fortunate in that we invested most of our personal money in 2 properties, both rented out. These have now been sold, and luckily we managed to also make a small profit on them too, which was fortunate considering the market.

    My wife and I tend to have a lot of holidays (and I mean a lot...lol) and quite simply the interest we receive from savings/investments helps to pay for them.
    In our case we had a fairly sucessful business, now run by the sons, and obviously still receive a small income from that which helps too. Thats how we can afford the cars we drive...lol. Love my cars.

    Who did you have that 10k saved with matey.... ?
    Last edited by 67688c; 16th April 2010 at 12:32.

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    Regular Member the-wizard's Avatar
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    don't pay anything off your mortgage if your not tied, swap it to a offset mortgage!, then you put the £10k in a bank account witch will then offset your mortgage by them charging you £1 less interest for every £1 you have in the account 'DAILY', to benefit from this pay every single penny you earn into this account ie wages, family credits, family allowance, and still pay your original mortgage payments and the amount you owe will decrease quickly and you still have your £10k. you can access this as you would a normal account. (barclays/woolich product) plus monthly you get a statment showing account activity for every day!.

  8. #8
    Regular Member 67688c's Avatar
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    The suggestion above by The Wizard is one I would recommend too, TBH I never thought of that option, but well worth considering, and it would still give you access to your savings as and when required.

    http://www.offsetmortgagecentre.co.u...-mortgage.html

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    Money was saved with Nationwide, luckily I have a few ISA,s and savings else where but just found the return really shocking!

    I will look into offset mortgages some more

  10. #10
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    Quote Originally Posted by the_wave_rider View Post
    Money was saved with Nationwide, luckily I have a few ISA,s and savings else where but just found the return really shocking!
    AAMOI, I assume you queried the interest rate with Natiowide, in case they have made a mistake. I've never heard of any ISA being that low, I mean... thats the sort of pathetic rate many banks pay you for credits in your current account.

    Anyway....best of luck matey.

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