Pay to Pension or Mortgage

Tim_Nicholas

Hi All,

Question is, do I reduce pension payments as currently saving for a house, or keep the payments up ?

I am thinking that reducing pension payments and having a bigger deposit might be more beneficial in the long run ?

Discuss

Thrugelmir

Tim_Nicholas wrote: »

Hi All,

Question is, do I reduce pension payments as currently saving for a house, or keep the payments up ?

I am thinking that reducing pension payments and having a bigger deposit might be more beneficial in the long run ?

Discuss

Reduce pension and save for a bigger deposit.

A bigger deposit saves interest in the longer term.

Use a mortgage calculator to see how much interest you pay over 25 years. Its truly frightening and often overlooked by people when buying.

JayZed

How much (as a percentage of your salary) do you currently pay into your pension? How long have you been paying in/how much do you have saved? How old are you? And what proportion of your target house price do you already have saved?

Not being nosy, but details like are going to have an impact on your financial priorities.

Josepina

I'm thinking similar...reduce pension payments and increase mortgage payments.
Also if you pay off mortgage earlier you can retire earlier?

Cat695

erm surely it would be better to have a bigger pension.

Tim_Nicholas

I am 30, currently own a house, but working out in Germany, so it is rented. GF also owns a house which is rented, but living with my parents while we save.

Pension payments about 8% net of salary (LTD company, so varies by year depending on contracts I have), been paying in since 2005

We are looking at houses for approx £175k, and have £7k saved, which is increasing by around £1,200 pcm

Thrugelmir

Cat695 wrote: »

erm surely it would be better to have a bigger pension.

Repaying the mortgage early would mean that you could save more in the longer term.

Tim_Nicholas

Is there a calculator out there which works out how much you might save ?

Thrugelmir

Tim_Nicholas wrote: »

Is there a calculator out there which works out how much you might save ?

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

You'll need to work out how much the total repayments are over the term of the mortgage though.

Tim_Nicholas

Thanks, is there one which calculates the savings if you overpay ?

Thrugelmir

Tim_Nicholas wrote: »

Thanks, is there one which calculates the savings if you overpay ?

Take your pick.

http://forums.moneysavingexpert.com/showthread.html?t=155707