paying off mortage

elusive

hi great posts on this forum,

we have a mortgage for 27000, any advice on how to save money paying off the mortgage.. we have a tracker plan..thanks

davies0121

Who is your mortgage with? Have you checked your t&c? Some allow 10% overpayments and some £500 a month. I would recommend checking out one of the mortgage calculators listed in this forum. I used one and after a bit of playing with figures, realised I'm going to shorten by term by 23 years!

EssexHebridean

Hello and welcome to MFW

It's obviously a great time to be on a tracker rate, and with interest rates as they are currently for you, it's probably best to stash any spare cash into the best interest paying savings accounts you can find - I take it you have already used your years ISA entitlement? If not then shop around for a cash ISA and start off by looking to get as much as you can into that. As and when interest rates then change then you need to start monitoring for the point at which you are paying higher interest on your mortgage than you are achieving through savings....once that point is reached then time to start paying that extra cash into the mortgage instead.

As has already been mentioned, you will need to check out what your lender will allow you to OP - also double check if any fees are payable in relation to extra payments. Northern Rock who we are with an excellent - we can OP as much as we want and we are just increasing our monthly DD as time goes on to allow the overpayments. If your lender charges a fee though you will be better off to let the cash accumulate in savings and transfer it once a year so you only pay the fee once. You will also need to tell your lender that you are not wanting them to reduce the monthly payments if you are making lump-sum payments.

Some of the overpayment calculators liked through this board are brilliant - it can become addictive playing with figures to see how much you can cut the term, and even relatively small OP's can really make a difference over the term of the loan.

Hope that helps?! Good luck!

elusive

thanks for your help