Hi ceyda

You are getting plenty of good advice from our visiting 'expert'. Really, if you feel this is money you can safely tie away, then the decision is to compare rates. Any interest on a cash Isa is tax free - but normally only paid annually, whereas interest with the Nationwide is charged daily, so an 'overpayment' will have an immediate effect on the balance - but you can only overpay by £500 per month.

For example, currently National Savings and Investment Cash Isa is attracting 5.8% variable rate, which is probably higher than your fixed rate with the Nationwide. Given that the Isa rate is proably higher than you are paying on your mortgage - and you can only overpay in smaller amounts - you could save the funds until it is time to review your mortgage requirements and then reduce the balance at that time - and possibly look for a more flexible mortgage product next time.

Hope that helps - thanks for using our site.

Louise

Will this amount make much of an impact do you think? Or is something better than nothing at least?

Fantastic, yes it is with Nationwide. I am on a good fixed rate at the moment but that ends next year so thought before I convert to a higher rate to try and reduce the amount I will obviously get charged on next year. I am also just about clear of credit card debts also. Is the mortgage option better than the isa one then do you think?

HI

The interest rate i was referring to was on the mortgage.
On an mortgage where interest is calculated annually, if you pay a payment today then the amount may not come off the loan until 31st dec so you will be charged interest upto this amount on the full £100k

Sounds like your lender is Nationwide, they allow you to pay £500 pcm extra off so you could do this over 6 months period without penalty and the good thing is that if your lender is nationwide. then they charge daily interest, therefore any overpayment comes off the balance immediately.

Check the rate of interest you are paying with Nationwide and also that you have no other debts,c/card etc to repay then if these are similar rates to the ISA rates this would be a good option paying over the 6mths.


Andy

No, I already have £3000 in savings for 'just in case' as you advised so this is another £3000 I'm now thinking about. I can over pay on my mortgage but only up to £500 every much if I want to avoid any charges, which I obviously would!
In regards to checking the interest daily or annually, did you mean with the isa or mortgage? How could this help me decide which would be a better option to do to save/earn money?

Hi

Good question.

Couple of things to consider

Is this £3000 all of your savings ? If so, then I would suggest keeping it for "emergency purposes" and a cash ISA would suit or a deposit based account.
Should you need to pay unexpected bill or through loss of income for some time this would help
Most advisers suggest having 3 months bills/ net salary incase of emergency to cover outgoings

Next thing to look at is can you overpay with your lender, please check and also is the interest annual or daily,again a call would answer this

Depending on the outcome of the above then a choice can be made.

Cheers

Andy

I have roughly £100,000 maortage with roughy 23 yrs remaining. I have £3000 to invest. Would I be betta off putting this into a mini cash isa or paying into my mortgage account to reduce interest??