ISA mortgage

ISAs are investments in the stockmarket in a tax efficient way. Using an ISA to pay off your mortgage could make a lot of sense but you must remember that anything to do with the stockmarket involves risk. So, at the very least, you should understand the risks and the benefits of choosing saving through an ISA to repay your home loan. In effect, you are taking out an interest-only mortgage and saving into an ISA to build up funds to repay the capital sum you have borrowed. The traditional alternatives to an ISA mortgage are repayment and endowment.

When you take out a mortgage loan, you make be doing so for 20 or 25 years and at the end of that period you'll want to have enough cash to pay off your debt. ISAs do not offer a guaranteed return and you would probably need to arrange term assurance (life cover) for the mortgage sum as well to satisfy your lender. However, one of the benefits of ISAs is any profits you make are free of capital gains (CGT) and income tax and could work out much cheaper than an endowment mortgage. With good investment returns you could find yourself in a position to repay the mortgage loan sooner than expected and for a lower outlay.

Get professional help from a qualified independent mortgage advisor and see how much you could save on your mortgage payments. There's no obligation, just plain good advice.

See also: Financial Services, Mortgages