Mortgage overpayments

waterman3

I'm in two minds whether to continue saving into isas or to start overpaying my mortgage.

I'm on the SVR with Bank of Scotland at 3.5% with 34 years remaining and reckon if i could make some overpayments, i'd really save alot in the long term.

I've got £13,200 in an ISA (maximised for this tax year) and have saved up £4,000 in a savings account.

I'm thinking about using the £4,000 to overpay my mortgage, draw out £5,100 from my isa and open up the new A&L 3.5% ISA and use the remaining £8,100 to overpay mortgage.

I know that drawing money out of an ISA is usually a no-no but the A&L ISA doesn't accept transfers in.

If i do decide to make an overpayment, can you choose reduce the capital amount or reduce my monthly payments or will both happen automatically?


Sorry if i've rambled. Thanks for any advice on any of the above

Leew1231

I would overpay on the mortgage as much as poss. Probably keep £5k in savings aside for any unforeseen occurences. You will find that your payments will reduce unless you also reduce the term.

waterman3

Thanks. Yeah, i guess i might as well overpay now while i'm on the SVR, as i won't incur any penalty charges.

dimbo61

You can ask your lender to keep your payment static and ignore any overpayments,
This will therefore reduce the term and your mortgage payment will stay the same each month unless the interest rate goes UP

dannymccann

My mortgage adviser also mentioned to me that if you do make any overpayments, you need to make it clear to the bank that you are repaying capital, and not interest, hope that is helpful....?

getmore4less

How much surplus income do you have each year.

If more than the ISA allowence then you need to thing about cashing in existing savings.

Think longer term planning,


If you have used our ISA allowance this year remember you need to wait for the next tax year.