Shorter term vrs saving for deposit

dynamoMan

Huy guys,

Is there a rule of thumb that applies to this. I plan to move to my bigger final house in a year or two.

Am I better changing my existing mortgage term I have on my flat to be a very short term say adding £1k per month to my payments, or putting that spare 1k into a savings account to act as a deposit on my next property.

I've been trying to figure this out for a while but getting myself into knots over what is the best approach.

Peelerfart

spare 1k into a savings account , that way you have ultimate flexibilty when it comes time to move.

opinions4u

If the rate on your mortgage is more than the rate after tax on the savings account, then reducing the mortgage debt may be the mathematically best approach.

But if you can get 4% net on a regular saver type account and your mortgage rate is, say, only 3% then the savings route has benefits.

Peeler's comment above about flexibility also has merit. When you move house, many expenses are up front. Not much use if they are all tied up in the equity of your property.