Pay off mortgage or invest lump sum?

[kelfoan]

I have £5k to either invest in a 3 yr ISA bond at 3.5% or pay off some of the mortgage with current rate of 1.49%. Not worried about needing it for emergencies, so which option from a financial point is best?

[theonlyone]

Pay a lump off the mortgage ..as it's a millstone around the neck ..

[factor-fiction]

If you think your interest rate wil average less than 3.5% over the next 3 years then why not put it in the ISA bond then consider paying the sum off your mortgage in 3 years time. But if your mortgage deal is due to end soon then paying off the mortgage sooner may be better. Another factor is whether the mortgage has early repayment penalties

[spudqueen]

I honestly don't know which of the two is best, but I do know that the Post Office have got a Growth Bond out at the moment which is offering 3.7 %.

[Whoever]

An article in the press yesterday said that the Bank of England's interest rate would stay fairly flat for about five years so I don't know what would happen to your mortgage rate over that period time. It partly depends how much you owe on your mortgage and your attitude to debt. Personally I hate debt of any kind because it makes me indebted to somebody else who can control my fate, so I'd probably use the money to reduce my mortgage, even if saving it made more sense financially. From a financial viewpoint it's normally advised to save the money if the savings interest rate is higher than your mortgage interest rate, and repay the mortgage if that interest rate is higher than any savings rate you can get.

[sara3]

can you lend it to me to get my bathroom done, please?

cheers ;o)