ISA Mortgage

An ISA mortgage is a form of mortgage repayment that is suitable for certain types of housebuyers.

An ISA or Individual Savings Account which were introduced in 1999 are designed for UK residents where returns are free from income and capital gains tax. ISA accounts can have 2 components (a) Stocks and Shares (b) Cash. You can subscribe up to £7,000 each tax year, in which no more than £3,000 can be invested in Cash, with the balance of £4,000 being invested in stocks and shares. Alternatively the whole £7,000 can be invested in stocks and shares.

If you invest in a Stocks and Shares ISA the financial risk is higher than a standard repayment mortgage, but it can also be a faster method of repayment.

With an ISA mortgage you pay only the monthly interest on your mortgage, with the rest of the money going into an investment ISA. The aim is to raise a lump sum large enough to pay off the mortgage in full after a number of years. An ISA mortgage can provide a preferable rate of repayment in many cases, but this comes with the possibility of encountering a shortfall if your investment performs poorly.

Those engaging with an ISA mortgage should keep a close eye on their investment and its performance, seeking to ensure the returns meet the needed amounts. If you are unsure what to do you should seek independent financial advice.

Initial Rate	Type	Period To	Provider	The Overall Cost For Comparison APR	LTV
4.99%	Discount	Jul 2010	HSBC	6.50%	80%	More
5.34%	Fixed	Jul 2009	Norwich & Peterborough B.Soc.	6.80%	85%	More
5.49%	Discount	Jul 2010	HSBC	6.40%	90%	More
5.59%	Standard	Jul 2033	Northern Bank Ltd	6.00%	75%	More
5.65%	Offset		Beverley	6.30%	75%	More
5.69%	Discount	Jul 2010	Barnsley	7.20%	85%	More
5.69%	Discount	Jul 2010	HSBC	6.40%	90%	More