Invest in premium bonds or mortgage?

[user1471519931]

Hi everyone, I've managed to save a spare £4000 during the lockdown simply from no holidays, no shopping, no meals out etc... I could put this towards my mortgage as it falls under the 10% I can overlay this year with no fees.... Or I could invest this money in premium bonds in the hope of winning the jackpot!? 🤩

What would you do ladies? 🌸

I thought the upper limit was £50K, too.

...because you can hold bonds for your children or grandchildren if they are under 16...in fact I have bonds in my own name as well as in my
Boys' names.

S&S ISA is likely to give you the best return. I’ve stopped overpaying the mortgage as the interest rate is only 1% and the money in my ISA increased by over 8% last year.

Mortgage

@user1471519931 entirely depends on your mortgage rate and term. For example if you’re on a 3% rate, 5 year fixed rate term, and have 8 months until your term is up, then I’d look to see if you can get into a lower LTV band by overpaying and therefore get a better overall rate, which could help your outgoings.

What’s your mortgage rate? What kind are you on (variable/fixed rate)? How long til the end of your fixed period? How much do you owe and how much is the property worth? Lots of qs but will allow us to have the full picture

@mercimacherie

My dad has £100,000 in Premium Bonds and only ever gets max £50 per month, but usually £25. I doubt investing £4000 will be worthwhile.

No he doesn't.

My daughter’s bonds have always been in her own name.

@Polmuggle
I think I know what he does / does not have. He has £50000 in his name and has £50000 in my brothers name, he also wanted to put £50000 in mine but I refused.

@HollowTalk

He also has rental properties and money in various savings accounts. The interest he was earning on his savings was minimal and he wants easy access to the cash, so he decided to invest in Premium Bonds.

I think I know what he does / does not have. He has £50000 in his name and has £50000 in my brothers name,

So, fraud ?
Or has he gifted this £50K to your brother?

@kite22 as far as I know it's in my brothers name and any winnings go to my brother (so far it's only been max £25/£50 per month). However, if my dad wants or needs the cash he's trusting my brother to transfer it back to him. No idea if that's fraud or not and I don't particularly care, it's nothing to do with me.

The point of my post was that even with a total of £100000 in bonds he still only ever wins the £25 prizes, and do far max 2 per month. Suppose there is always the chance of winning a bigger prize though.

On £50/100k he should be pretty much getting the stated payout of around 1% pa when averaged out over time, which is the best you can get on instant access, by some margin.

I have around £35k and over the past couple of years have got 2% in 2019, 6% in 2020 when I won a £1k prize (they say 98% of prizes are for £25 and the other 2% the bigger ones) and so far this year have won £225, so even if I win nothing for the rest of the year, am already ahead compared with a normal savings account and my mortgage interest rate, which is what I would otherwise be doing with the money.

But I've had 3 x £25 in a couple of months and have won 4 x £25 in another month. For me it's more about keeping the money liquid and an interesting exercise in statistics, but you'd probably have to be a bit of a mathematician to be in it for that reason.