Home repayments better than ISAs

Britons who choose to tackle their homeowner debt could ultimately be better off than those who save in ISAs, new research has shown.

The study by First Direct has revealed that if homeowners had put their savings into a mortgage offset account, rather than an ISA, over the course of the last ten years, they would be better off by over £3,000 (£3,306).

By offsetting savings against home repayments, householders pay less interest on their mortgage. As mortgage rates over the longer term tend to be higher than savings rates, their money is working harder.

With interest rates maintaining their historic low, more homeowners may consider this to be an option in order to ward off financial problems in the future.

Kevin Still, director of Atlantic Financial Management, says: "Clearing debts has been a priority for many people in the UK where they have surplus disposable income.

"But there are many just reliant on interest rates remaining low just to meet existing mortgage repayments and minimum contractual payments on the likes of credit cards debts. The period of interest rate stability has helped millions of UK homeowners."

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