Paying inheritance off mortgage

mangomango

Hi

I've been lurking for a while and I'm a MFW. I'd be grateful for a few thoughts/ideas....

My partner and I are 28 and 29 and are due to receive upto £20,000 inheritance in the next few months. We would like to reduce our mortgage and ideally try to pay it off by age 40ish. It is currently £95,000 outstanding over 22 years. Our deal lets us overpay upto £499 a month and we are fixed at 6.05% for 5 years until May 2013.

Of the £20,000, we would like to put £5000 aside in savings leaving £15,000 for overpayments. I would like advice on the best way to do this i.e. put the £20,000 in one account to maximise interest and make 30 overpayments or put the £5000 into an ISA and keep the £15,000 separate for overpayments? or another thought..would it be worth keeping the £20,000 and switching to an offset mortgage once our fixed rate is up? we can make upto £150 a month overpayments from our own money until the fixed rate is up.

We don't have any debts apart from the mortgage.

Any advice much appreciated!

Rebob

Ask your mortgage provider how much you are allowed to pay as capital repayments each year first. A lot seem to say 10% per year which would be £9,500.

mangomango

Thanks Rebob, I will look into it.
So I may only be able to repay a max of £9500 a year inc overpayments?