over payments or isa?

psvlovegroovers

hello all!

i have a buy-to-let flat that i mortgaged at interest only - i did this so i can pay over payments when i can afford it, or not if times are hard!

So far i have been lucky and been able to over pay by £200 /month. effectively making it a repayment mortgage.

the flat value has gone up from £125000.00 to approx £135000.00 (8%).

Three qs:

1. does that mean the £2400.00 i have over paid in the last year effectively occurred 8% interest?
   
2. Am i better continuing with this repayment or better off saving the £200/month into a ISA or high interest account?
   
3. Do i need to consider capital gains tax etc? (i do not plan to sell for years yet)

Your advice will be gratefully received!!!

UK007BullDog

1. Whatever you overpaid means you reduced the mortgage and reduced the interest amount you would have to pay.

2.If your interest rate is 8% then I would overpay more and not stick it in the isa as you gain more by reducing your debt.

3. Maybe, who knows what the tax man has in store for us in the future. But right now if you were to sell then yes you do have to pay CGT.