pay mortgage or stick in bank and pay monthly

mushypee_2

Hello,

got a lump sum coming to me in the next few weeks and i was wondering if it would be better to pay of most of my mortgage in one go or stick it into the bank and set up a direct debit to pay the mortgage monthly.

any suggestions please?

Wh05apk

Need more info, what rate are you paying, any penalties if you overpay etc

Evilm

depends on the interest rate but I would think that you would be better to pay the mortgage off (Dependent on the APR you can get on any savings vs. the rate of the mortgage).

check with the provider what the penalties are: Nationwide used to be you incurred a penalty if you overpaid more than £500 a month but Halifax allow you to overpay up to 10% of the mortgage in a year (lump sum or small amounts added up) without penalty.

lutzi1

You'll need to provide more info if people are to give you the best advice. For example, as well as your mortgage rate, any penalties etc, what are your financial circumstances - are you employed and is this cash a welcome windfall you don't need, or are you going to need to live off it for a while/ use it to prop up your monthly income as your post possibly implies?

Also, as well as doing all the sums and seeing what makes the best sense as far as the numbers go, it is VITAL (nowadays more than ever!) that you always have ready access to a good amount of cash in case things get difficult, you lose your job or whatever. No point tying it all up and then not being able to access it if you really need it. Something else to think about - HTH.