ISA vs mortgage

[AllTorque]

Hi everyone - just need a bit of quick advice. If you're a higher rate tax payer, is cash saved in a mini-ISA better off there or better off paying off the mortgage. The interest saved on the mortgage would be more, but I'd be losing the previous years allowances to the ISA (around 5 years). Personally, having a lower mortgage just seems somehow more appealing, but not sure on the numbers.

Any advice appreciated

[minimax]

do what saves you the most money IMHO

compare ISA rate with mortgage rate and you have the answer...

also there's no limit on mortgage creps (well, as long as you have a good deal )

eeeeezypeeeezysqueeezy

[AllTorque]

minimax said:

do what saves you the most money IMHO compare ISA rate with mortgage rate and you have the answer... also there's no limit on mortgage creps (well, as long as you have a good deal ) eeeeezypeeeezysqueeezy

I agree with this, but my point is I won't ever be able to regain the 5 lost years on building up the cash-ISA. So say my mortgage is paid off, I'll be losing out on that tax-free interest. See the conundrum?

[minimax]

AllTorque said:

minimax said: do what saves you the most money IMHO compare ISA rate with mortgage rate and you have the answer... also there's no limit on mortgage creps (well, as long as you have a good deal ) eeeeezypeeeezysqueeezy I agree with this, but my point is I won't ever be able to regain the 5 lost years on building up the cash-ISA. So say my mortgage is paid off, I'll be losing out on that tax-free interest. See the conundrum?

so do you prefer access to ready cash immediately, or do you prefer to save money? there's a need for advice here which won't be solved by people giving you their opinion IMHO

have a word with your financial advisor

in answer to your question, when your mortgage is paid off you can begin with the ISA saving again...

... after all, if you stop your creps and stick to ISA saving think of all the interest you'll lose over years

[RichardD]

AllTorque said:

.. but my point is I won't ever be able to regain the 5 lost years on building up the cash-ISA. So say my mortgage is paid off, I'll be losing out on that tax-free interest. See the conundrum?

Isn't this year the last of the 3k allowance, from April 2006 it will only be £1k anyway? Typical government "people must save", then they take away the incentive....

[pmanson]

I haven't bothered with an ISA i've just got premium bonds instead this year.

Might be worth a look?

[AJLintern]

Apparently if you save the maximum amount in premium bonds (£30k I think), on average you will get a pay out equivalent to a 5% interest free savings account. Of course you may get no pay outs at all, but then again you might win £100k

[muley]

[redacted]

[muley]

..the interest on the mortgage would be money handed over to the bank every month. If you have an offset mortgage and savings to cover all or most of it you might be better of with the ISA, but otherwise you would still be shelling out interest every month.

[clubsport]

AJLintern said:

Apparently if you save the maximum amount in premium bonds (£30k I think), on average you will get a pay out equivalent to a 5% interest free savings account. Of course you may get no pay outs at all, but then again you might win £100k

There is one monthly prize of 1 million pounds...I have had the allowance for some time and it does come out suprirngly close to 5% over the years

[andy400]

clubsport said:

AJLintern said: Apparently if you save the maximum amount in premium bonds (£30k I think), on average you will get a pay out equivalent to a 5% interest free savings account. Of course you may get no pay outs at all, but then again you might win £100k There is one monthly prize of 1 million pounds...I have had the allowance for some time and it does come out suprirngly close to 5% over the years

Got rid of my Bonds due to obviously being the unluckiest man alive - my payout on max investment worked out at approximately sod-all for months on end!
So I spent some of it on a TVR, and put the rest in my Mortgage off-set account.