Overpayments on a Shared Ownership Mortgage

dimbo61

So the simple answer to the OP question is to overpay on the mortgage and save into ISA,s as much as possible with the hope in the future of buying all
the property when he or she can afford it.
This is your home and the main aim would be to have the property 100% paid for ASAP and well before retirement !
Getting the best rate of return on your savings either overpaying or saving into ISA,s must be taken into account.
I have money in ISA,s paying a better rate of return than having it in my offset account.
Consider offset mortgages when your existing deals end and GOOD LUCK

Bargain_Rzl

dimbo61 wrote: »

This is your home and the main aim would be to have the property 100% paid for ASAP and well before retirement !

Again, not necessarily. The main aim IMHO is to have "a" property 100% paid for before retirement (not necessarily the current one), or alternatively by that stage to be generating an income from investments that's covering the rent.

It may well be, depending on market conditions, that investments elsewhere will outperform appreciation in property value, which in the long term will either enable the outright purchase of the remainder of the property OR cover the rent in perpetuity OR enable a step up the ladder to a higher-value property. (Personally, much as I love my current home, I would like to be able to spend my retirement in a place with a spare bedroom and a small amount of outside space.)

Obviously the risk factors have to be weighed up: the main sticking point with the strategy I've outlined, as I see it, is that if you have a large amount in savings you would be unable to claim benefits should something go wrong, whereas if your savings are tied up in your property you can legitimately declare that you have no money. Plans for old age may be affected by similar factors.

By the way, sc0u8100, your circumstances sound so similar to mine (London zone 2, 40% share, bought in 2006) that I'm starting to wonder if we're neighbours

sc0u8100

Bargain Rzl - Nope, we're not neighbours, as I live in west London, but it's nice to hear from someone else in SO scheme in zone 2 in London!

I'm working on the plan to have enough investments to cover the rent when I retire. But if prices drop, I may buy. I'll keep my options open for now, but I'm definitely aiming to pay my mortgage off asap.

Mac_Sami

Thanks guys - the plan is to save the maximum I can into my ISA (£300 a month), overpay the mortgage as best as possible, in the mean time saving the extra money I then have (which won't be much) along with my ISA for when the value becomes more affordable.

If I were to staircase to 80%, there's always the option a few years down the line to buy outright and sell that way when a prospective buyer is looking to purchase.