ISA Mortgage Calculator

An ISA (Individual Savings Account) is a tax efficient investment which can be used to repay your mortgage. The idea is the same as an endowment mortgage, if you're old enough to remember these, but the money you save should work harder for you because of the tax advantages. Unlike an endowment, an ISA does not have life assurance included within the savings plan.

How do ISA's work?

A payment covering interest is made to your lender, this is less than you would pay if you had a repayment mortgage because no capital is being repaid. The capital that you would have repaid is invested in the ISA. As long as the growth rate on your ISA is greater than the interest charged on your mortgage then the ISA will be better than a repayment mortgage and you will be able to repay your mortgage sooner. The important thing to remember is that the growth on an ISA is not guaranteed and for this reason it must be monitored every year - you may have to save more money if the ISA underperforms for a long period of time

This calculator assumes that the payment to the ISA is the same as the capital payment that would have been made on a repayment mortgage. The growth rates used are industry projections and are not guaranteed, you could achieve higher or lower growth rates in reality. The result shows what your savings would be worth for the each of the growth rates 5%, 7% and 9%.

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ISA Mortgage Calculator Mortgage Amount Existing ISA Mortgage Rate % Time (yrs)	results returned after  pressing calculate
ISA contribution: <%response.write(formatcurrency(contribution2))%> Interest to the lender <%response.write(formatcurrency(interest))%> Cost of ISA Mortgage <%response.write(formatcurrency(interest+contribution2))%>	Tax Free Lump Sum Growth rates allowing for charges at 5% 7% 9% <%response.write(formatcurrency(-value5b,0))%> <%response.write(formatcurrency(-value7b,0))%> <%response.write(formatcurrency(-value9b,0))%>
For the figures used, a repayment mortgage would cost <%response.write(formatcurrency(repayment))%>