From: "Matt Robertson" 
Newsgroups: uk.finance
Subject: Re: cash isa equals mortgage
Date: Mon, 25 Jul 2005 21:28:24 GMT


 wrote in message
news:1122309327.485154.35570@z14g2000cwz.googlegroups.com...
>
>
> Adds wrote:
> > > A financial advisor I spoke to the other day suggested that it was not
> > > worth having a mortgae and a cash ISA when I could pay off all the
> > > mortgage with the ISA, are there long term benefits of keeping the ISA
> > > ? I am now thinking that i should just pay of the mortgage and save on
> > > repayment insurance, tax etc.. I'm not sure why this never occured to
> > > me before .. ;0)
> >
> > 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.
>
>
> 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
>

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.