taking cash out of mort and sticking it in savings
Discussion
Ok, not strictly business but I thought I might get a more sensible answer in here...
my mort is fixed at 5.7 for the next 12-13 years ( 15 year deal) now I took more than i needed, and payed it back, and the mort is interest only with overpayments at any time as long as I have a mort for £1 for the duration of the fixed term im fine... SO obviously at the mo Im actually paying at a rate which is slightly higher than the normal repayment figure, and if the s
t hits the fan I can drop this down to the int only figure, or take a payment holiday with a simple phone call.
Now looking at some of the 12/24 month fixed rate savings deals I can find banks offering 7.2./7.4
This would seem to worth while pulling out the 100k from the mort and banging it into one of these accounts... and making 1.5-1.7 % per year for doing nothing?
Now as with everything I assume its not that simple as using one of the web calculators it says its only worth having savings rather than paying off mort on my mort interest rate if I can get 7.2% why is that. I take it the tax man will want a slice of the Interest im getting, and with no MIRAS i cant offset the interest I'd be paying..
Any pointers?
if I took the extra 100k out my LTV would be about 65% from its current 35%
cheers
G
my mort is fixed at 5.7 for the next 12-13 years ( 15 year deal) now I took more than i needed, and payed it back, and the mort is interest only with overpayments at any time as long as I have a mort for £1 for the duration of the fixed term im fine... SO obviously at the mo Im actually paying at a rate which is slightly higher than the normal repayment figure, and if the s
t hits the fan I can drop this down to the int only figure, or take a payment holiday with a simple phone call.Now looking at some of the 12/24 month fixed rate savings deals I can find banks offering 7.2./7.4
This would seem to worth while pulling out the 100k from the mort and banging it into one of these accounts... and making 1.5-1.7 % per year for doing nothing?
Now as with everything I assume its not that simple as using one of the web calculators it says its only worth having savings rather than paying off mort on my mort interest rate if I can get 7.2% why is that. I take it the tax man will want a slice of the Interest im getting, and with no MIRAS i cant offset the interest I'd be paying..
Any pointers?
if I took the extra 100k out my LTV would be about 65% from its current 35%
cheers
G
Graham said:
I take it the tax man will want a slice of the Interest im getting, and with no MIRAS i cant offset the interest I'd be paying
Higher rate tax payer? Then the taxman will take 40% of your interest.100k @ 5.7% = £5700 interest
100k @ 7.2% = £7200 interest BUT tax of £2880...leaving you £4320...so worse off.
Ade355 said:
Rather than put your cash in a interest account, why not work it in another way. A way that generates a capital gain where you can use your allowance ?
I’d be interested to know about any interest bearing-like products that generate a capital gain, if that's what you meant 
BigAlinEmbra said:
Probably likely to be a fee for remortgaging too, which will eat into your profits...
nope thats the whole point.. when I re mortgaged last time I took out an extra 100k then paid it straight back... my mort is interest only but i can over pay at any time and the rate was fixed for 15 years... as long as I owe £1 at the end of the fixed term I pay no penalty.. so im currently repaying it as if it was a standard repayment mort plus a bit to pay it off. if I want anything back that i've paid, its a simple phone call and a few forms, its not a remortgage...and people wonder why NR got into trouble..
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