£7k to pay off mortgage or add to ISA

[oracleslave]

If you pay off the mortgage except for £1k or £500, you then always have the option of increasing it again should you need some more money.
Say an extension to the property? Redeceration? It's easier to do that when you have an existing mortgage than having to open a new one.

Keep the option alive but reduce it to almost nil, but not quite. A guy who I work with pays £2 a month .

[LazyFan]

If you pay off the mortgage except for £1k or £500, you then always have the option of increasing it again should you need some more money.
Say an extension to the property? Redeceration? It's easier to do that when you have an existing mortgage than having to open a new one.

Keep the option alive but reduce it to almost nil, but not quite. A guy who I work with pays £2 a month .

[ChimpMaster]

You only get to open 1 ISA every year. If you miss a year, that's it - no more chance to have a 7k tax-free investment. I always use my 7k as I see it as a significant part of my passive income in later years.

You're only paying £30 a month mortgage interest... let it ride and pay it off in smaller chunks whenever you have some cash handy.

[dude69]

How do you get paid?

Dividends?

Do you go into higher rate allowance?

For most contractors, paying into the ISA will be the better option.

A cash ISA will beat mortgage payments in the medium term purely because of the relative value of the tax shelter (40% income tax) versus the marginal tax rate on dividends (either zero, or 25% at most).

Shares will certainly beat a normal mortgage rate (<6%) in the long-term, but if you are paying 25% tax to pay of the mortgage, then the difference will be marginal and the risk-free return of the mortgage may well be slightly lower.

[BrilloPad]

why nt get divorced? I reckon 700k should cover it.

oh you said 7k.

[miffy]

Not any more - I understand the Land Registry keeps 'electronic' files of the deeds on behalf of the owner, mortgagor and/or mortgageee.

That's true. I can vouch for that. Been mortgage free for 2 years now.

When I settled up, I spoke to the Halifax and they said paper copies aren't given to the property owner anymore. They simply update the electronic copy at the LR and that's it.

I did get a letter from the LR though but that's it, no copy of any deeds as such.

[Fishface]

While you still have a mortgage the bank does you the really big favour of looking after the deeds to the property.

Split the money - Put half in an ISA and pay half off your mortgage.

Not any more - I understand the Land Registry keeps 'electronic' files of the deeds on behalf of the owner, mortgagor and/or mortgageee.

rid yourself of debt

[s2budd]

Cheers all for the replies

I can't afford to pay off the mortgage & use up the ISA allowance.
I forgot about the Life Insurance.
Even though it's an old house the deads have been destroyed and computerised. Cheers Halifax in 1999 !
They would have been interesting reading.

The Mrs would not need the life insurance, I certainly would not if I'm dead and there are no children.
I will clear the mortgage, cancel the life insurance and add to the ISA after April.

Cheers

[malvolio]

It's not just the mortgage though is it. What about the Life Insurance. Since there's no tax relief on mortgages any more, there's no real reason to have capital tied up in one.

[NoddY]

While you still have a mortgage the bank does you the really big favour of looking after the deeds to the property.

Split the money - Put half in an ISA and pay half off your mortgage.

Sell all UK property and get out of Britain. You heard it here first.

[wc2]

While you still have a mortgage the bank does you the really big favour of looking after the deeds to the property.

Split the money - Put half in an ISA and pay half off your mortgage.

[Sockpuppet]

I'd say pay off the mortgage. Better to have no debt and a £1k ISA than £7k debt and £8k in a ISA.

[BlasterBates]

You´re right stocks are down, put your money in the ISA. The average gain on shares in the longterm is 10%, so when stocks are down you usually get a sharp bounce back (but not always ). You´re probably paying 5% on your mortgage so that is a 5% plus.

Payoff more of the mortgage more when stocks are booming.

[s2budd]

Next month I could either use £7k to pay off my mortgage or put £7k into my ISA.

I cleaned out my ISA about 18 months ago to pay off a chunk of mortgage so the ISA is only worth about £1k. I pay about £30 per month in interest on my mortgage.

It would be nice to clear the mortgage but I have not used any of my ISA allowance for this financial year and shares have dropped so it might be a good idea to take the £30 hit in interest every month and put the money into the ISA.

I would like some advice, which would you do?