2011 mfw

de1amo wrote: »

i am aiming to clear my mortgage by 2014 but i am saving rather than over paying-i get 4pc less tax on my savings and my mortgage is 2pc on a svr but İO--l do wonder what the pros and cons are of doing it my way as opposed to overpaying? -i seem to feel more secure with savings in the bank and know i cant ever get 55k from my lender again.--i would join here on my strange path!

I know what you mean about putting money into savings - its they psychology of watching a balance go up or watching a balance go down. It's taken me a while to get to appreciate the latter.

According to Martin's Mortgage vs Savings Calculator:-

Enter Your Mortgage RateIt's worth paying off your mortgage with savings unless... % you earn 2.5% as a basic rate taxpayer,3.3% at the higher rate
or 4% at the additional rate


Can't see any problem in what you are doing as long as your SVR doesn't rise quicker/more than savings interest rates. So just review the situation regularly.

The other consideration - is there any restriction on the size of repayments. If next month you decided it wasn't worth having your money in savings but you be able to make it an OP without penalty?

Another issue - and quite a controversial one.....What happens if you find yourself in circumstances (unemployment, illness) where you would need assistance with living costs. If short term you would be okay - you'd be able to cover your expenses. But if its long term, your savings pot would effect what you could claim and once it's drained you'd still have your mortgage sat there. I'm not encouraging anyone to sit back and think 'I'm going to scrounge off the state' but this is something you may want to think about.

Just for the record, incase anyone thinks I've not provided for myself and am plotting to claim lots of benefit if the worst happens - I have 15 months worth of expenses covered in my savings and insurance. In anycase it seems to me that the people who really need assistance don't get want they really need and others make a career out of it.......but that's another thread

İ dont actualy live or work in the uk--my earnings there come from an old occupational pension that was awarded due to poor health--one of those very stressed out people!--the only worry i have with the pension is that they are revising its connection to the RPİ and putting it on the CPİ--if the worse things happened i would let the place out.

The mortgage was actually taken to buy my home abroad and give myself a good base to start a new life from. İ have gone from strenght to strength in my quest to rebuild my life and health-i have married out here and we have a booming English school which gives us both good incomes. i dont include my 'foreign' life in my Uk total which in some ways leads to an inner insecurity which i wish i could overcome!

i will watch the interest rates with interest--i can get about 7,5 pc here but there is a lot of consideration about the exchange rate to be thought out--if uk rates go up the pound strengthens which means i get more lira for my money--i put it in various pots out here--gold and business opportunities --i get about 15pc in dividends from these.

No 27 reporting in £41.06 paid this month bringing my total to £123.18 for the year so far. I started work again this month so with 2 full time wages coming in I can finally start making 'proper' overpayments from next month:D

p.s. how funny, no 28 posting just after no 27 :rotfl: - no we did not co-ordinate that in advance!

No 5 reporting in...........

total overpayments this month were £190 which was made up of ebay sales, quidco and cashback from credit card :j:j