Mortgage overpayments?
Discussion
Smiley198700 said:
Of course I have 
- could get a nice soft top for that money 
but head rules over heart here - it's quite staggering when you see the interest you can save by paying off the mortgage early even with something modest like £100/month overpayments
yes, but that's over the course of the whole thing - 25 years or so. - could get a nice soft top for that money but head rules over heart here - it's quite staggering when you see the interest you can save by paying off the mortgage early even with something modest like £100/month overpayments£4.5k is a drop in the ocean in comparison, spend it on something you'll enjoy.
oyster said:
Unless you're using all or a large chunk of that annual allowance and building the pot year after year, then using an ISA at all for savings is a bit pointless.
As a couple you can get 5% interest on savings up to £13,500, 4.5% on savings up to £28,500.
And you can still get 3.5% if you have £88,500 in savings. This using high interest current accounts (obviously tax needs to be paid from these). But it still beats cash ISAs.
I agree as I am using the high interest current accounts instead of an ISA this year as well.As a couple you can get 5% interest on savings up to £13,500, 4.5% on savings up to £28,500.
And you can still get 3.5% if you have £88,500 in savings. This using high interest current accounts (obviously tax needs to be paid from these). But it still beats cash ISAs.
When it reaches the end of this tax year, I may put it in an ISA in the hope that rates on them do go up and then refill the current accounts or may just leave it where it is.
Crazy that you can get more in a current account than a savings accounts but even with the hoops you have to jump through to use them its well worth doing. And many give you access to regular savers that you can drip feed from them as well.
I'm in a similar situation but Santander on a 2yr fix. They said that I was allowed to pay up to 10% over the life of the term, doesn't have to be regular monthly amounts, can be a lump sum. I originally thought it was 10% extra on a monthly basis, but reading into it in more detail - it turns out it's 10% of the mortgage value!
So, I called them up and asked if I could make an overpayment which they obliged. Be careful though - they are a bit sneaky. I spoke to two advisors. One said that I would have to reduce my monthly payments, which would in essence lead me to a longer time to pay off the mortgage, past the 2yr fix.
When you make an overpayment just remember to tell (not ask them!) to keep your monthly payments the same or you negate the benefit of making that overpayment!
Good luck with it, we're in the process of buying a new home whilst in the fixed period. It means we can port the mortgage over but would have to manage two mortgages, effectively. One on the fixed rate, and the second for the additional money we need to borrow but at a different rate. But when we're within 6 months of the term ending, then we can port over the mortgage to one single rate, but only if we set up the new mortgage within 90 days of completing the sale on my property - otherwise we'd need to pay an ERC. Hope this helps anyone else in the same situation.
So, I called them up and asked if I could make an overpayment which they obliged. Be careful though - they are a bit sneaky. I spoke to two advisors. One said that I would have to reduce my monthly payments, which would in essence lead me to a longer time to pay off the mortgage, past the 2yr fix.
When you make an overpayment just remember to tell (not ask them!) to keep your monthly payments the same or you negate the benefit of making that overpayment!
Good luck with it, we're in the process of buying a new home whilst in the fixed period. It means we can port the mortgage over but would have to manage two mortgages, effectively. One on the fixed rate, and the second for the additional money we need to borrow but at a different rate. But when we're within 6 months of the term ending, then we can port over the mortgage to one single rate, but only if we set up the new mortgage within 90 days of completing the sale on my property - otherwise we'd need to pay an ERC. Hope this helps anyone else in the same situation.
arun1uk said:
When you make an overpayment just remember to tell (not ask them!) to keep your monthly payments the same or you negate the benefit of making that overpayment!
No you don't, you get the benefit of a reduced monthly payment. The term remains the same, but ultimately you still pay less overall. Keeping the monthly payment the same means that you increase the amount you over-pay each month.I've elected to have my payments reduced each month in line with the overpayments I make. At the moment, it's reducing by £5 per month. Doesn't sound a lot, but 3 years of that = £180 less per month.
It's up to the individual how they want to play it. I'm well aware of what reducing the standard payment does and have my overpayments planned out to suit. Smaller standard payment allows more flexibility for me, though some may not have the willpower to resist the urge to spend the difference each month!
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