Paying Off Mortgage

CvPiper

Hi,

Wonder if anyone with a better grasp of the figures can help me.

We as FTB bought a house last year, with a mortgage of £60,000 required.

I have got a 6.19 % fixed rate, for 5 years (25 yr term)(so about 8/9 mths in).

I have always had the aspiration to pay it off when the 5 years are up, just by hard work earning in that time.

Would it benefit me more to pay off the max 10% of o/s mortgage overpayment per year, or to keep paying my mortgage, and then at the 5 year end, just pay the lot off.

If anyone can work the figures and tell me what the difference in total price paid would be I would be grateful.

Thanks

dimbo61

If 10% is the max you are allowed to pay off in any one year then do that first as you are paying 6.19% interest.
Then save into cash ISA,s with 2x £3600 into a best buy ISA paying 6/6.5%
AT THE MOMENT.
You need to keep a careful eye on the rate you are getting and move your ISA,s each year to obtain the best rate.
Next look out for regular saver deals such as the one offered by halifax at 10% before TAX and save £500 a month ( EACH ! ) if you can afford.
Building up your savings is a good idea anyway as you will have an Emergency fund to pay for any major disasters that might happen and not just clear your credit card after the sales or buy that plasma TV you fancy.
GOOD LUCK

dimbo61

If you can pay 10% off each year and save 2x£3600 in ISA,s each year you will be able to pay off the mortgage in 5 years.
If that is the best way to go at the end of your 5 year fix will depend on the rates at the time and what your mortgage reverts to ( ie tracker BOE +1.25% as an example ! )
You have the 5 year fix so overpay first then save into ISA,s and see where you are in 5 years.