Overpay the Mortgage?

Financial_Savvy

Am I best to overpay the mortgage with the money that I am saving on 0% credit card? Currently have about £900 of debit on it and not paid a penny of interest on it. :j

MarkyMarkD

Yes, unless:

(a) you have more expensive debt you could pay off first;
(b) your mortgage rate is less than the (after tax) rate you can earn by putting the money elsewhere - which is only likely if you are not a taxpayer or your spouse is not a taxpayer and you save the money in their name.

Voyager2002

However, remember that the debt is only interest-free for a limited amount of time, and then you will need to repay it or pay hefty interest charges. If you over-pay the mortgage then you may not have the money when you need it. That is why I prefer to keep my stooze-pot in a high interest account.

homersimpson_3

apply in good time to transfer debt to another cc (at least 6 weeks before) and ensure you have access to funds to repay debts just in case application for another credit card refused. if more flexible you can usually add to it relatively easy to pay debt.

Financial_Savvy

Thanks all. I have found a credit card with HSBC which as 0% on BT and purchases for 9 months. Also importantly it has no handling fees unlike other CC companies that I have looked at. So I can transfer onto this before the other card introduction offers expires.

All I need now is a CC to do the Christmas shopping on, which gives me somekind of cashback, and then transfer the debt onto the HSBC card and I am away again!

Any ideas? :j :T

YorkshireBoy

Financial_Savvy wrote:

All I need now is a CC to do the Christmas shopping on, which gives me somekind of cashback, and then transfer the debt onto the HSBC card and I am away again!

Any ideas?

HSBC credit limits are not overly generous for stoozers carrying high levels of "debt".

Check out Egg Money for your cashback card.

"At least 1% cash back on all purchases guaranteed until 2007 and, from 16 November until 10 December 2005, you'll get 2% - that's double."

http://www.egg.com/visitor/0,,3_79731--View_1654,00.html

batvink

I'm sure it's said many times elsewhere, but I pay everything I owe on 0% cards into a savings account, attached to an offset mortgage. This September, I reached the point where my mortgage is effectively interest free!

Technically the net effect is the same as overpaying my mortgage. At the same time, I have a buffer of savings to pay off the credit cards should I reach a point where I can't get another deal.