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Paying Of Mortgage Vs Savings.

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My mortage is fixed at 3percent for 10years and are allowed to pay 10% of each year extra

i have access to regular savings accounts that pay 6% . dont forget that when these accounts expire you wont pay tax on the interest earnt.

and 4 current accounts that pay 5%.

I have buffer if i need a big purchase ie new boiler, new car etc

Should i pay of my mortgage first and then take advantage of the above offers or should i take advanatage of these offers first as they have higher rate of interest then start paying of my mortgage few year down the line instead>

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Hi

"i have access to regular savings accounts that pay 6% . dont forget that when these accounts expire you wont pay tax on the interest earnt. and 4 current accounts that pay 5%."

Could you share with us the opportunities that pay 6% and 5%? I can't find any?

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I checked FD:

http://www1.firstdirect.com/1/2/rates-and-charges/rates/Savings-accounts

You get 6% on a max of £300per month. So thats a maximum of £3600 and that only at the end of the year. I might take it up; specially when interest is taxfree next year.

The nearest serious a/c (£20k) is Santander which pays 3% if you pay in £500pm and have direct debits.

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Best to pay it offf your mortgage and use 0% credit cards to fund your savings

i understand what your saying but i only have credit card fo emergency. Just never like the idea of doing that in case things go wrong

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I am not qualified to offer you advice and you haven't provided enough information to enable proper advice to be given but, if I was in your shoes, I would

max out all available ISAs each year

have a buffer of at least 6 months total living expenses (ideally 12)

then pay off the allowed 10% of the mortgage each year

then add to the savings accounts you mention

others will have different views and you will (and should) form your own opinion

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I checked FD:

http://www1.firstdirect.com/1/2/rates-and-charges/rates/Savings-accounts

You get 6% on a max of £300per month. So thats a maximum of £3600 and that only at the end of the year. I might take it up; specially when interest is taxfree next year.

The nearest serious a/c (£20k) is Santander which pays 3% if you pay in £500pm and have direct debits.

You can have a single and joint account with Santander, so potentially £40k at 3% - £1000 of which will be tax free from next April for most people

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You can have a single and joint account with Santander, so potentially £40k at 3% - £1000 of which will be tax free from next April for most people

Good point.

> and joint accoun

Will you marry me? :)

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I did the first direct regular saving thing for 2 or 3 years when they paid 8%. I found myself waiting all year for the great event when I got the money back and gained about £100. Waiting a whole year for just £100 didn't seem worth it. It was easier to go in on Saturday on overtime and get £100 that way.

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I did the first direct regular saving thing for 2 or 3 years when they paid 8%. I found myself waiting all year for the great event when I got the money back and gained about £100. Waiting a whole year for just £100 didn't seem worth it. It was easier to go in on Saturday on overtime and get £100 that way.

I did the same when i was saving to get house as it was one few way left to get any return and beat 1.5% isa i had at the time.. But as you said it just seems long time for £100 quid.

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I did the first direct regular saving thing for 2 or 3 years when they paid 8%. I found myself waiting all year for the great event when I got the money back and gained about £100. Waiting a whole year for just £100 didn't seem worth it. It was easier to go in on Saturday on overtime and get £100 that way.

indeed...sometimes it gets so tedious thinking about maximising your interest when it all amounts to is a hill of beans... geez is it worth it.

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I did the first direct regular saving thing for 2 or 3 years when they paid 8%. I found myself waiting all year for the great event when I got the money back and gained about £100. Waiting a whole year for just £100 didn't seem worth it. It was easier to go in on Saturday on overtime and get £100 that way.

8% (virtually) risk free return is nothing to sniff at!

For a £100 return you must have only had £1250 in there, unless my terrible maths has let me down again. Or, did it have a low balance limit?

Plonk £40k into a couple of 123 accounts and you'll nearly have that £100 each month

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8% (virtually) risk free return is nothing to sniff at!

For a £100 return you must have only had £1250 in there, unless my terrible maths has let me down again. Or, did it have a low balance limit?

Plonk £40k into a couple of 123 accounts and you'll nearly have that £100 each month

I put in the maximum £300 a month. But it's only the first month that is in there for the year. the second is in there for 11 months. then you have to take tax off. If my memory serves me right £112 WOW

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I put in the maximum £300 a month. But it's only the first month that is in there for the year. the second is in there for 11 months. then you have to take tax off. If my memory serves me right £112 WOW

This is how these things are designed to look better than they are. People are fooled into thinking that they're getting 8% on the £3,600 they're putting in, but when you only get that rate by dribbling the money in monthly you actually get less than 5%. If they're currently only offering a 6% deal then you'd end up getting roughly 3.5% of the full amount you've put in.

If you can be bothered with the admin of this sort of thing (constantly moving small amounts of money amount for tiny actual profits) there is a small amount money to be made. For me it's not worth my time.

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8% (virtually) risk free return is nothing to sniff at!

For a £100 return you must have only had £1250 in there, unless my terrible maths has let me down again. Or, did it have a low balance limit?

Plonk £40k into a couple of 123 accounts and you'll nearly have that £100 each month

Is that before or after the £2 a month fee per account?

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Is that before or after the £2 a month fee per account?

Before, and also before any tax.

Then again, you can also get quite a bit of cash back on certain direct debits on top of the interest.

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You can really maximise futher as a couple

Santander 123 @ 3% - 2x single, 1 joint - 60k. 1800 p/a interest plus cashback

Club Lloyds @ 4% - 2x single, 1 joint - 15k. 600 p/a interest plus 18 cinema tickets

TSB @ 5% - 2x single, 1 joint - 6k. 300 p/a interest

FD, HSBC, Lloyds reg savers - 1 each per person, roughly another 700 p/a

Halifax Reward - 2 x single, £120 p/a

Tesco Current accounts - 18k (can have three each) @ 3% - 540 p/a

Nationwide - use the travel insurance cos you can have that indefinitely vs the interest (which is only for a year)

Then use Tesco internet saver to hoover up the interest and allows you to create your own DD's to satisfy requirements.

That's 4k p/a gross for a days work. Not bad. It's well worth 1 day of my time - I've set it up for my parents and advised my sibling and partner to do the same. If netting 15k as a family p/a is not worth your time, good on you!

If you have more, then start maxing ISA's out, but go stocks and shares rather than cash. Oh, and use your SIPP first before anything else because you'll never beat that initial tax relief gain no matter what you save in.

I do OK for myself via these methods and I'm single. Beats having the liability of a house.

Edited by Frugal Git

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I think these accounts are great for people that can set them up and forget it. Then have a nice surprise when the cheque comes in through the door. God is it a year already I thought it was only 3 months ago.

But for me it was like a watched kettle.

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This is how these things are designed to look better than they are. People are fooled into thinking that they're getting 8% on the £3,600 they're putting in, but when you only get that rate by dribbling the money in monthly you actually get less than 5%. If they're currently only offering a 6% deal then you'd end up getting roughly 3.5% of the full amount you've put in.

If you can be bothered with the admin of this sort of thing (constantly moving small amounts of money amount for tiny actual profits) there is a small amount money to be made. For me it's not worth my time.

Not being funny, but ut takes less than 10 mins to make that £100 per year via those regular saver accounts. Do you earn £600 p/h?

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