Mortgage/Savings

barnaby-bear

s.h.m.w wrote: »

Done!

Thanks mate really understand it better now. If im right would we be better off overpaying every month rather than paying £1-2k off in a lump?

Not necessarily either it's a balance of factors - you must read that link on choosing the right timing - you need to know how often the interest is calculated - if it's yearly continuous overpayments throughout pointless (might as well be in savings account and shifted across)... you need a balance....
1) a means to pay if work dries up/you become a dad/someone gets ill
2) money available to avoid expensive credit if you get a big car/boiler repair/replace bill
3) putting it somewhere not tempted to spend it...

you can think of your mortgage as an inaccessible (though some do allow you to get the over payments back in some many don't ) savings account - as long as you earmark it as such it's down to accessibility and rates as to where you put it. Psychologically though I like a regular overpayment as it means we don't get used to the spare money - it's too easy to let the lifestyle expand to absorb all spare cash :rolleyes:

Overpaying/saving to pay the mortgage off quicker is a very smart way to use your money IMO - housing is a basic need and important to quality of life.