Early repayment question

[pistonheadforum]

I have a mortgage currently on a fixed rate of 1.63% with nearly 4 years left to run on the current deal (15 years in total until full projected repayment). At the end of the current deal I hope to pay it off in full. I currently overpay each month by the maxim 10% amount.

Is there a benefit in continuing to overpay for the next 4 years or should I just save that money and put it towards the final settlement amount at the time?

From my rough calculations I'm not gaining much (maybe save £600) and would rather (given the current financial climate) have an additional amount of cash reserves just incase.

In terms of LTV the loan amount remaining is quite low - 80% already paid off.

To me that seems like a small saving by overpaying. I know that overpaying is generally the best strategy but maybe not when you already have an early exit planned?

Thanks in advance.

Edited by pistonheadforum on Friday 1st July 09:30

[Rob_125]

No real advantage, you might save £600, but you've locked away a significant amount of cash.

I mean you can get 1.5% interest with chase (interest is taxable over the set earning rates), and 1.4% average returns with premium bonds (returns not taxed). I would be keeping the assets liquid until you want to pay the mortgage off in full, personally.

[pistonheadforum]

Rob_125 said:

No real advantage, you might save £600, but you've locked away a significant amount of cash.

I mean you can get 1.5% interest with chase (interest is taxable over the set earning rates), and 1.4% average returns with premium bonds (returns not taxed). I would be keeping the assets liquid until you want to pay the mortgage off in full, personally.

Thanks - that was my conclusion but good to get a secord opinion.

[Abdul Abulbul Amir]

Check with your lender to see if you can have access to withdraw from your overpayment pot if you want to. Nationwide changed so you now can't.

[duckson]

Personally I have a separate pot in Premium Bonds to pay off my mortgage early in under 2 years time rather than overpaying, I’d go that way again.

Edited by duckson on Friday 1st July 21:43