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redemption fees
begbeer
Posts: 225 Forumite
thought I would ask you brainy people as not sure if I will be better off or not.
The scenario is, I have an interest only mortgage which I can over pay 10% a year, if I overpay more than that they charge me 3% on the overpayment, my mortgage rate is 5.29%.
So the question is am I better of overpaying and paying the 3% (talking about 40k) or putting it in a savings account, my fixed rate ends july 2011. so will not be able to put it in a long term savings account and also have maxed on my isa's
The scenario is, I have an interest only mortgage which I can over pay 10% a year, if I overpay more than that they charge me 3% on the overpayment, my mortgage rate is 5.29%.
So the question is am I better of overpaying and paying the 3% (talking about 40k) or putting it in a savings account, my fixed rate ends july 2011. so will not be able to put it in a long term savings account and also have maxed on my isa's
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Comments
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How big is the mortgage? (what is 10%)0
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The mortgage at the present is £182k0
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thought I would ask you brainy people as not sure if I will be better off or not.
The scenario is, I have an interest only mortgage which I can over pay 10% a year, if I overpay more than that they charge me 3% on the overpayment, my mortgage rate is 5.29%.
So the question is am I better of overpaying and paying the 3% (talking about 40k) or putting it in a savings account, my fixed rate ends july 2011. so will not be able to put it in a long term savings account and also have maxed on my isa's
Do the math.
5.29% on £40,000 between now and July 2011 is about £3,700 saved.
3% of £40,000 is £1,200 cost. Net result £2,500 saved.
= 3.5% p.a. return on your £40,000.
If you can find a savings account paying 3.5% p.a after tax please let us know.0 -
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