redemption fees

begbeer

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

getmore4less

How big is the mortgage? (what is 10%)

begbeer

The mortgage at the present is £182k

mortgage-adviser-now

begbeer wrote: »

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.

mortgage-adviser-now

begbeer wrote: »

The mortgage at the present is £182k

Then pay £18,000 off this year (under the 10% limit) , £18,000 next and spend the £4,000