Current Account Mortgage with 20k

D

dockingtrade

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I have a CAM with 1st active. I curently have my ssia 20k there (while waiting to decide) saving me x amount a month, works out at about 2% pa of the amount in: 20k. I know i can get better return 3.5% etc if i put the 20k in a deposit acc but am i better of leaving it in the CAM, reducing the debt quicker or is it a simple as: 3.5% is better than 2%, therefore put it in rabo for example.
 
The best demand deposit rate is Northern Rock's 3.60% gross CAR which is 2.88% after DIRT. I don't understand your figures above. If your mortgage rate is, say, 3.5% then sticking €20K into you CAM should yield savings of €20K @ 3.5%.
 
Apologies, Im not very clear above. You've explained much better.
So from your response. If I was to decide between a deposit account 3.6% or leaving 20k in CAM 3.6%(as example). I would be better off with the CAM because DIRT would reduce the deposit returns?
 
I looked at all the options in relation to this and I couldn't find any guarenteed savings product which would beat the rate gained on my CAM.Lots of products which might,beat it but you take your chance!
 
Using the money for the CAM rather than putting it on deposit should yield higher "returns" in the form of interest costs avoided. You would also have to factor in the loss (if any) of mortgage interest relief if putting money in the CAM meant that you no longer qualified for the maximum amount (i.e. €4K p.a. @ 20% per FTB mortgage holder in the first 7 years of the mortgage - less for non FTBs or year 8+) on the remaining outstanding capital but I suspect that this would be marginal
 
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