ChatterBank3 mins ago
Investment for mortgage
6 Answers
I have �45,000 cash to invest for 3 years intending to use this to reduce my mortgage of �96,000. I am tied into my mortgage for the 3 years & not allowed to make any overpayments. What is the best way to invest for maximum growth over this relatively short period? I have already used my annual ISA allowance.
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If you don't want to risk losing any money, then fixed-rate bonds are probably the best way.
If you tie your money up for three years the avarage rate, depending on which bank, would be about 5.2%-5.5%, and it's totally safe. just like a regular savings account.
You could use �30K of it to buy Premium Bonds, to try your luck at winning a million pounds!
If you tie your money up for three years the avarage rate, depending on which bank, would be about 5.2%-5.5%, and it's totally safe. just like a regular savings account.
You could use �30K of it to buy Premium Bonds, to try your luck at winning a million pounds!
Use your ISA allowance up if you havent already and leave some out to keep topping it up for the next 2 years.
Like stuart said, fixed rate bonds are safe but are literally untouchable for 3 years (hence why I would get the ISA allocation).
Personally, I would give the �30k a whizz on the premium bonds for a couple of months - you just never know!
Like stuart said, fixed rate bonds are safe but are literally untouchable for 3 years (hence why I would get the ISA allocation).
Personally, I would give the �30k a whizz on the premium bonds for a couple of months - you just never know!
I think Birmingham Midshires are currently offering a 5.5% One Year Savings Bond. However, with interest rates forecast to possibly rise again in November you may not want to lock into anything even as long as one year at the moment. I think 3 years is too short for any ventures into the stock market. If you don't want to have a bet on premium bonds I'd just go for the highest savings rate you can find and be prepared to be a "rate tart" if inteest rates rise and your current provider isn't giving a competitive deal.
If you want to be a rate tart take account of the fact that banks dont transfer your money instantly. So if it takes 3 working days to clear into you current account, and another 3 to get to the new, better account you have lost at least 8 days interest.
Some banks/BS are better thanothers at telling you about changes in interest rates.
Birmingham Midshires have a habit of bringing out new and better accounts so that they are top of the best buy tables, but you only find out about them if you are looking, they dont tell you. Northern Rock used to do that too, I think they now write to tell you about changes.
I would go for a phone or internet account, they often have the best rates.
Watch out for introductory bonuses, and remind yourself to enquire, when it is ending, what other accounts they have. You should be able to transfer between accounts with the same bank without lost days.
Some banks/BS are better thanothers at telling you about changes in interest rates.
Birmingham Midshires have a habit of bringing out new and better accounts so that they are top of the best buy tables, but you only find out about them if you are looking, they dont tell you. Northern Rock used to do that too, I think they now write to tell you about changes.
I would go for a phone or internet account, they often have the best rates.
Watch out for introductory bonuses, and remind yourself to enquire, when it is ending, what other accounts they have. You should be able to transfer between accounts with the same bank without lost days.
You may find in the small print or your mortgage terms & conditions that you can actually pay up to 10% off your mortgage, without incurring penalties - could be worth checking anyway........ if so, would it be worth paying this amount off each year, thus bringing your payments slightly down? Not sure if the interest paid on the 45,000 would outweigh this or the other way around........perhaps you can tell ME.....?
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