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Original poster

Mortgage overpayment or ISA

9 replies

carlottacandle · 04/02/2025 07:19

Hello all
Just wondering what you would do.
We have no debts, workplace pensions and we have 1 years worth of expenses saved. Ontop of this we have an ISA. I am wondering whether to keep that money in an ISA or pay a 20% over payment on our mortgage (it's NatWest so we are able to do that). ISA and mortgage are around the same rates. I am just wondering what others would do as there seems no real difference!

OP posts:
ShortBreak · 04/02/2025 07:23

This is really helpful to check where you are, and to consider your plans -

ukpersonal.finance/flowchart/

redfishcat · 04/02/2025 07:23

We paid the mortgage down, saving years of repayments and lots of interest.
Knowing no one can take our home is priceless

Footymum44 · 04/02/2025 07:24

If rates are similar this is a handy tool to help figure it out https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

ShortBreak · 04/02/2025 07:25

But if everything is in hand (pensions on track, and emergency fund built up etc.), then it could just be down to personal choice between the two.

Original poster
carlottacandle · 04/02/2025 09:17

I think it probably is just down to personal choice. I panic slightly when the cash isn't there. We will need a new (to us, anyway, not brand new!) car soon and we we are hoping that my husbands bonus from work might pay for it. However, we are not sure when it will be paid and how much so I guess what's holding me back is the fear that he won't get the bonus and all our money is tied up in the house. I guess I'll leave it in the ISA until I know for sure as there seems to compelling arguments either way. I'm desperate to get our mortgage payments down, but I think I'm being impatient!

OP posts:
7inchesFromTheMiddaySun · 04/02/2025 09:21

We've been overpaying our mortgage because we want to be mortgage free. However having some cash readily available is also very important. So I'd prioritise having that and whatever's left over would go towards the mortgage.

TimeForSpring · 04/02/2025 09:43

S&S ISA for my vote.

Between a cash ISA and mortgage? I'd probably go 50:50. ISA is probably the mathematical answer. Mortgage is the heart answer.

JaneandtheLaundry · 04/02/2025 09:56

The MSE Mortgage Overpayment Calculator helps you compare with hard numbers depending on interest rates (it doesn't help with S+S ISAs unless you can somehow guess what the growth rate will be, but it's definitely good with cash ones): https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

Swonderful · 04/02/2025 11:07

Have you got enough in your pensions? I would look at that first as you get tax relief on contributions.

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