what do i do?

sortmyfinaces

Hi all, right i have a mortgage of 138k on a tracker rate of base plus 0.69% approx. I am in a position either to save an extra £800 to £1000 per month or put it against the mortgage.

Or if there another alternative?

To date i havent made any repayments and am interest only

Many thanks in advance

Robert_Sterling_3

If you are allowed to pay some of your mortgage.
:T :j :T :j :T

sortmyfinaces

Robert_Sterling wrote: »

If you are allowed to pay some of your mortgage.
:T :j :T :j :T

yes i am, i checked today, its with Scottish Widows

thanks for reply

sortmyfinaces

anyone? what you think?

Masomnia

How secure is your job?

jonny2510

If your really undecided, you could pay half into savings, half as an overpayment.

That way you minimise the risk of making the wrong decision (but also obviously minimise the potential gains available).

Do you have some savings set aside for emergencies?

nrsql

The mortgage rate is 1.69%
Paying £1000 off that would save you about £1.40 per month interest.
Of course you will be getting about 60p interest after tax in a on that in a fairly basic acount so the saving would be about 80p per month - less if the boe reduces rates as expected.

I would look to save more than pay off the mortgage here to give you the option of deciding what to do with it later. Look at how much you are allowed to pay off the mortgage per year and if you get close to that amount pay it off at the end of the mortgage year.

I would maybe pay off something like £200 per month and save the rest - maybe not pay anything off untill you get a sizeable savings pot.

Stavros_3

Get rid of the biggest debt (mortgage)whilst the rates are very low, these won't last forever.

nrsql

Stavros wrote: »

Get rid of the biggest debt (mortgage)whilst the rates are very low, these won't last forever.

Why would you concentrate on a low interest rate debt just because it's big?
More efficient to work on highest interest debts first.

I would assume the poster doesn't have other debts anyway but I would be cautious about paying off a mortgage in the current climate.

Jonbvn

You have to ask yourself what happens if you are made redundant. Any extra money you will have saved will maybe be enough for a few months mortgage payments, until you find another job.

If overpay the mortgage now and are made redundant without savings, then you could be repossessed.

sortmyfinaces

:j My job is very secure

I have basically cleared all my other debt in the last 6 months eg car loan