interest only/repayment

[creditman]

i have taken out a £125,000 interest only mortgage .How much would i be wise to put away into an ISA (to pay off the debt each year)to counteract not being on a repayment ,this is only a short term plan 3 years maximum before reverting to repayment?

[brian]

You can only put up to £7200 into a shares ISA, or £3600 into a cash ISA, per annum.

[IFA]

If you can afford to put extra money away in an ISA as a temporary measure until changing to repayment in 3 years time, why not have repayment now?

Then you wouldn't have to worry about whether you are saving enough each month or not.

If full repayment is too expensive for you, and you've chosen interest only as a means to pay less, then the answer to your question is probably "as much as you can afford".

You'd be best off seeking financial advice if you really want a specific answer to your question as it depends on other factors such as the type of ISA, the rate of return, the term of your mortgage etc etc...

[Kaz]

I'm loathe to correct you Brian but hasn't the maximum you can put into a cash ISA gone up to £5,100?

[brian]

No probs, Kaz - I think that happens from next month, so definitely needs revising.

[Kaz]

I've obviously just given my age away being such a smart *rse as mine has gone up already!

[Dan_Manchester]

Rather than using an ISA you might want to consider an offset mortgage whereby your savings offset the interest on your mortgage but you can still use this money should you need it?