We have a Virgin One Current Account mortgage with a fairly low oustanding balance owed of 36K but also have 10K savings in there so am only paying interest on 27K. We have no other investments except for 200 in premium bonds and no spare cash available from income to invest. Our policy is to leave the same amount in the account every month to pay off the mortgage which we are paying off on a capital repayment basis, having cashed in a lousy endowment which was not so much underperforming but so ridiculously out of kilter it looked as though the day could well be arriving when the Insurance company might expect a payout from us rather than the other way around!
I've just received some advertising blurb from National savbings about premium bonds and it appears that it is now possible to invest in premium bonds on a monthly basis with a minimum 50 per month investment. We are now seriously considering investing 50 per month into premium bonds and reducing our monthly payment to Virgin by the same amount. We have a relatively low income so cannot afford to take risks and as it is possible to cash in premium bonds whenever we like, with no loss of capital this seems like a good way of having a chance to win some cash while keeping our original stake safe.
An online calculator shows that we would lose 19.69 in interest in the first year, but over the 20 years we have budgeted for our mortgage to last, this rises to an interest loss of 11,079.55 (I suppose due to interest on the interest?). Obviously I am hoping that this would be offset by a few wins on my premium bonds, though having said that, I've held my current 200 worth of premium bonds for 6 years and not won a penny, and as a rule, do not seem to have a lucky streak.
Anyone have any thoughts on this please?
Lydia