Discussion
So it looks like I've got 50 big ones (give or take) coming my way in the next few months from my lovely grandad who is no longer with us.
My mortgage has 70 grand left on it and I have a fixed term for another 21 months
At the end of the 21 months I want to pay the lot off with the 50k and some savings.
So in the meanwhile shall I buy 50ks worth of Ernie's finest bonds and prepare myself for perpetual disappointment or should I just stuff the lot in atoms 1 year saver and get 500 quid in interest?
Any other ideas?
My mortgage has 70 grand left on it and I have a fixed term for another 21 months
At the end of the 21 months I want to pay the lot off with the 50k and some savings.
So in the meanwhile shall I buy 50ks worth of Ernie's finest bonds and prepare myself for perpetual disappointment or should I just stuff the lot in atoms 1 year saver and get 500 quid in interest?
Any other ideas?
princeperch said:
So in the meanwhile shall I buy 50ks worth of Ernie's finest bonds and prepare myself for perpetual disappointment or should I just stuff the lot in atoms 1 year saver and get 500 quid in interest?
Premium bond prize rate is currently 1.4% (https://www.nsandi.com/interest-rates) versus 1.5% best buy instant access savings (Marcus) or 2% 1 year fixed (Atom, https://www.moneysavingexpert.com/savings/savings-... )If you are a higher rate tax payer then premium bonds should do better on a post-tax basis. But paying off your mortgage will probably be even better (as long as you don't need the liquidity).
You should be able to pay 10% off each year with no penalty, so about £14k off before the fixed deal ends.
That will leave you about £36k, if you have a Santander 123 account though there is a £5 account fee you still get 1.5% on upto £20k and cash back on bills that normally cancel out the £5 fee, you can even open a joint account with your partnet and put the remaining £16k into a second account.
Given the sums of money involved, short time frame, the Santander 123 accounts are 0% risk and 100% easy access.
That will leave you about £36k, if you have a Santander 123 account though there is a £5 account fee you still get 1.5% on upto £20k and cash back on bills that normally cancel out the £5 fee, you can even open a joint account with your partnet and put the remaining £16k into a second account.
Given the sums of money involved, short time frame, the Santander 123 accounts are 0% risk and 100% easy access.
As has already been said, find out how much you can pay the mortgage down over the next 2 years penalty free.
The interest you save by doing this is likely to be much higher than the interest you earn going down the other route.
This will also bring your total repayment balance down in 21 months time.
The interest you save by doing this is likely to be much higher than the interest you earn going down the other route.
This will also bring your total repayment balance down in 21 months time.
I honestly wouldn't bother spreading it around as it's short term. It's just not worth the setup time, especially with Santander with direct debits etc... I have 2 x 123 accounts I keep going but I wouldn't set them up now the interest rate has halved!
Premium bonds are ideal and you have the maximum amount which pretty much guarantees a win each month, yes the average rate of return is slightly less than other offerings but you also have the chance to win big and it's quite good fun, the app is good.
As above, just aim to pay as much as you can on the Mortgage (and use existing savings if you can) and get it down to 50k if you can with the money in the bonds ready to pay off when the time comes.
Premium bonds are ideal and you have the maximum amount which pretty much guarantees a win each month, yes the average rate of return is slightly less than other offerings but you also have the chance to win big and it's quite good fun, the app is good.
As above, just aim to pay as much as you can on the Mortgage (and use existing savings if you can) and get it down to 50k if you can with the money in the bonds ready to pay off when the time comes.
princeperch said:
Cheers.
Might spread it about a bit, Santander, bonds, and the atom account. I'd be pissed off if I put it all in bonds and only got a few 25 quids in return.
Don't bother, you won't gain anything, how much interest do you think you will get in that period?Might spread it about a bit, Santander, bonds, and the atom account. I'd be pissed off if I put it all in bonds and only got a few 25 quids in return.
Pay off 10% which is allowed under any deal, that reduces the amount of capitol remaining instantly, so more of your subsequent payment is reducing capitol further while reducing the interest you are paying.
Ernie's finest for the rest.
Instant access with the chance of winnings well in excess of realistic interest for the short term.
Having looked into it myself I have done exactly this.
Beware of Premium Bonds ........they ain't that good.
"They do protect your cash, so even if the returns don't look a good bet, it's fine to put a non-significant portion of your money in them, provided you're aware it's more for fun than returns. Before deciding, use the calculator to look at the real odds. If you're willing to take the gamble after that, then it's fine.
Many people often think: "I'm likely to get about 1.4% and there's a small chance of winning a million". But the main point is that this isn't correct. You're actually likely to get quite a lot less than 1.4%, and there's a negligible chance of winning a million. If you know and you're OK with this, then investing in Premium Bonds isn't a bad plan."
https://www.moneysavingexpert.com/savings/premium-...
"They do protect your cash, so even if the returns don't look a good bet, it's fine to put a non-significant portion of your money in them, provided you're aware it's more for fun than returns. Before deciding, use the calculator to look at the real odds. If you're willing to take the gamble after that, then it's fine.
Many people often think: "I'm likely to get about 1.4% and there's a small chance of winning a million". But the main point is that this isn't correct. You're actually likely to get quite a lot less than 1.4%, and there's a negligible chance of winning a million. If you know and you're OK with this, then investing in Premium Bonds isn't a bad plan."
https://www.moneysavingexpert.com/savings/premium-...
Edited by P.Griffin on Wednesday 21st August 14:44
P.Griffin said:
Beware of Premium Bonds ........they ain't that good
https://www.moneysavingexpert.com/savings/premium-...
Did you read that?https://www.moneysavingexpert.com/savings/premium-...
If you have a decent aount they're fine.
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