cash isa equals mortgage

I guess it depends on the rate you're getting in the ISA, and the rate you're paying on the mortgage. But it's unlikely that the ISA rate is higher than the mortgage rate.

AFAIK, there are no long term benefits of keeping money in a cash ISA rather than paying off your mortgage. If it was me, I'd almost certainly pay off the mortgage. You can always save back into the ISA with the money you would have been paying into the mortgage.

It *might* be different if the money was in a share ISA, depending on whether you thought you might get a higher return on the stock market than your mortgage rate.

A.

Depends what you are getting in interest on the ISA compared to what you are paying in interest on the mortgage. If the latter is less than the former then you are making on the deal. If not, you're not. But you might be able to get a better deal on your mortgage by remortgaging to a lower rate. Depends on your circumstances. I doubt if you need repayment insurance if you could repay the mortgage from ISAs if you were out of work or ill, so you could stop that even if you kept the mortgage on. I can't see that there's any tax implications - what tax did you mean?

Once you've cashed the ISAs in to repay the mortgage you won't be able to replace them other than via your annual ISA allowance, so keeping the mortgage and the ISAs means that you'll still have tax-free interest when you've repaid the mortgage (if the rules for this are still there then).

Rob Graham

Thanks for the replies, Currently I get 5.0% from my cash isa and the mortgage is 5.99% So with roughyl 16 k in each it costs me at least 160 quid a year , add on the 150 quid per year insurance..

The trouble with switching to a bargain mortgage rate is that there is apparently normally some sort of arrangment fee, so it might not be worth it given my mortgage amount.

I kind of assumed that saving was a good idea, but thinking about it I'm not sure now since I also have a mortgage.

If it takes 3 years to pay off the mortgage then how much will I loose over this time compared to having payed it off now..

That's what i need to consider. And since I intend probably to move house at some point and get another mortgage then this makes it less worth while to keep the isa as well doesn't it ?

Si

Depends how long the mortgage still has to run, remember that ISA,s will cease to exist in about five years. Was this just a casual conversation or had you approached him for advice? If the latter then ask him to justify.

They will? I thought they were "guaranteed" to stay around until then, which doesn't mean they'll certainly stop after that. They could get a life extension then, just as they already have had recently.

In message , Rob graham writes

But his ability to save will be reduced because of the mortgage repayments. I suppose it depends on if he can still maximise his mini cash isa savings whilst still repaying the mortgage.

Yes, you might be able to get a cheaper mortgage (mine is currently 5.05%), but as you say, you'd almost certainly have arrangement fees to pay as well, so it almost certainly isn't worth it unless you can get one for less than

2%! (If you can, tell me where :-).

I don't think the fact you may need to get another mortgage in a few years is a problem at all. Presumably at that type you'd shop around anyway, so wouldn't necessary got for the same supplier anyway.

I'd certainly pay off the mortgage... If only to get ride of the debt. It might be worth you playing around with some of the on-line calculators at

to see how much you'd be paying/earning in interest.

A.

Yes, it's a balancing act and there really isn't enough info from the OP.

Rob

Nationwide (I've not ties to them!) are offering a rate more than 1% less (I think it's 4.79%) than your current rate, with a 95 arrangement fee than can be added to the loan, so a switch would save money.

I'd still be more inclined to clear the entire loan if you're able to do so.

Almost certainly. They were guaranteed up till 2009 IIRC, which by pure co-incidence will probably be about the time of the next election.