Should I overpay or not?

sniffer72

Hi
In light of the new rate drop I contacted Barclays to ask what the reduction in my monthly payments would be. I have a lifetime +.29% above base rate tracker. Currently barclays base rate is 1.5 (this will drop to 1.0% for march) so my rate is 1.79%. They havent applied this rate yet and will be assessed in October so my overpayment is based on 5.29%. I was advised that the rate would drop by around £200 a month. Is it more beneficial to carry on overpaying or reduce the rate and set up a savings account at Halifax who are still offering 5% fixed for a year?


Thanks

kazzys51

how much are you intending on overpaying and are you intending on doing it monthly/regular? kazzys

dimbo61

If your mortgage is now costing you either 1.79% or 1.29% and you can get 5% before tax from a Halifax regular saver then sign up for the regular saver in the morning and ask you lender to reduce your mortgage payment inline with the recent BOE cuts.
Savings rates are pants so if you can get 5% so much the better ( OH not a non tax payer by any chance !! )
Build up the savings and fill a cash ISA ( each ) as rates better than 1.29%

sniffer72

Hi
Thanks for the advice.

I am intending to overpay £200. I am currently used to paying that so it would be silly to not to continue.
Yes I am a tax payer.

I just didn't know whether long term its better to pay off the mortgage but at these low rates is there any benefit.

getmore4less

sniffer72 wrote: »

Hi
Thanks for the advice.

I am intending to overpay £200. I am currently used to paying that so it would be silly to not to continue.
Yes I am a tax payer.

I just didn't know whether long term its better to pay off the mortgage but at these low rates is there any benefit.

If you are not using your ISA allowance/and or dont have a saving buffer then that is a sensible option while the rates are higher than the mortgage.