INTEREST ONLY MORTGAGE Should I overpay?

dipper8

I have a £65000 interest only mortgage.
I have an endowment running for another 7 years.It is on track to pay £85000 at maturity.
I have some cash left at the end of each month and thought about overpaying on the mortgage payments each month.
Does anyone have any comments on whether the over payments would be a good idea?
Any ideas would be welcome.

Voyager2002

What interest do you pay on your mortgage?
Are there any payments for over-paying?
Where do you keep your spare cash now; what interest rate do you earn on it; what tax do you pay on the interest?
Have you used up your ISA allowance for this year?
If you were to over-pay, and then for some reason you needed money quickly, how easily could you get hold of it?

Answers to these questions would enable you (or me) to answer your question.

dipper8

Boy that was quick
6.19% with nationwide
no charges for over payments
spare cash with nationwide 5.3%
have used all ISA 's mine and the current wifes
not a higher rate tax payer
If I needed money quick will have at least 3 months outgoings in nationwide savings for back up

cheers

dimbo61

It you and " current" wife have savings in ISA,s then you have emergency funds.
You are losing interest by paying 6.19% on mortgage and only earning 5.3% before TAX on savings.
If you can make unlimited overpayments then pay off some of the mortgage.
Nationwide usually have a £500 a month limit but that is on repayment mortgages.
If you have spare cash and have filled your ISA allowances then pay off some of the IO mortgage
In 7 years time you will have a larger sum out of the endowment as you will need less money to pay off the IO mortgage.
GOOD LUCK

dipper8

thanks dimbo

will have a re think and take some action

cheers all

sheslookinhot

rather than overpay I/O, switch to partial /full repayment.