Overpayment query - advice please

gringouk13

Hello
I hope someone can give me some advice please. Bottom line is , I would like to know if it is worth overpaying on my mortgage or not. If so how much the savings would be .
Basically, I have a £155000 mortgage fixed on a replayment basis for the next 5 years. My morgage is based on 20 years.
I pay £986 per month.
I know people say it is beneficial to overpay but I would like it if someone can tell me why and maybe have some facts or calculations/figures just to show me if it is worth it.
I feel I need the remaining money now but I was wondering if it would make a difference if I paid just £50 extra in over payment every month what difference would that make. My overpayment allowance is quite high for this mortgage.
Any advice if you can steer me in the correct direction would be very appreciated
best wishes
Paul Vinnie

CloudCuckooLand

Feed your figures in here, choosing the "inc Overpayments" option, scroll down to see the full effect;

http://www.moneysavingexpert.com/mortgages/mortgage-calculator

Looks like £50 saves you 2 years or so.


Usual recommendation is to make sure you have emergency savings, then after that its down to which has the highest interest rate, the mortgage or ISA/savings - pay off the highest.

gringouk13

Hi there

Excellent thanks for the reply. I will take a look and ponder

regards

Jonbvn

Depends on your mortgage interest rate, which you have not stated.

CCL is correct that you should pay money into the one with the highest interest. However, be aware that there is £16k savings limit for means tested benefits, if something unexpected happens.