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Any thoughts on savings rates and likely movements in the next month or two ... seen one at 3.4% fixed for 12 months. We have a small pot and happy to tie it in for 12 months.
Good deal or best waiting a wee while until current turmoil and interest rate/sterling movements settle a bit?
Cheers
Base rate is heading for 6% within weeks. Savings rates increases will follow this. I wouldn't fix immediately.
you can get 30 day notice accounts at 2ish - I'd go for one of them at the moment
My mortgage is fixed at 1.86% for the next four and half years.
Because of this I'm not overpaying, makes more sense to save it, rates are already available above that, then cash in savings at the end of the fixed rate period and pay off a chunk then before remortgaging.
Also means I have access to it in an emergency which I wouldn't had I overpaid.
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How high savings rates will goni don't know. The premium bond expected return went from 1% to 1.4% recently, not keeping with the movement in the base rate but going up a bit
OP, have you got your mortgage covered/fixed already?
Because of this I’m not overpaying, makes more sense to save it, rates are already available above that
Make sure you do your maths on the compounded values/savings of overpayment, its not just the headline rate which counts.
Bookmarking! 🙂
Ours is just sat in a Nationwide Instant Saver account making bugger-all. Been reluctant to invest with markets as they are.
I'd also add that over £1000 of interest attracts income tax, so watch out for that - it quickly erase the headline rate unless you use a tax free wrapper e.g. an ISA.
Make sure you do your maths on the compounded values/savings of overpayment, its not just the headline rate which counts.
compounding works exactly the same whether saving or borrowing, so you don't need to worry about this. You should consider any tax implications on your savings, but most people don't have enough saved up with current interest rates for the taxable income to be an issue
I get that 5lsab - but not if a 3% savings rate is only available for 3yrs say, whereas paying 1.85% on the same amount over 25 years would equate to more paid than earned.
I appreciate it requires a lot of future gazing & of course you can move the savings around but it often requires some awareness and housekeeping to keeping it effective most of the time. Its not necessarily fit & forget.
I get that 5lsab – but not if a 3% savings rate is only available for 3yrs say, whereas paying 1.85% on the same amount over 25 years would equate to more paid than earned
true,in that scenario the best thing to do would be to earn 3% for the first 3 years, then shift the money onto the 1.85% mortgage once the rate of that is higher.