Intelligent Finance Overpayments

rosegirl36

We have around £65000 left to pay on our mortgage with just over 10 years to go,this is part repayment and part interest only.We pay £274 a month and £67 a month endowment The Interest only part is £45000 which was supposed to be covered by our endowment, unfortunately there is a projected shortfall of £12000(we have gone down the missold route to no avail) I was wondering what people thought our best options were to make up the shortfall?
We are with Intelligent Finance and there is an option to make overpayments on the repayment and interest only parts of the mortgage.I was thinking of overpaying an extra £100 a month on the interest only part?
Would this make sense or is there a better alternative?
Any help would be greatly appreciated

Thrugelmir

By paying down the interest only part you will be able to easily keep track of the shortfall between the endowment and the outstanding mortgage balance. As the endowment payout is in no way guaranteed.

I assume you've opted for £100 overpayment as that's £12k over 10 years which is your projected shortfall.

Seems a very sensible plan.

opinions4u

What's the rate of interest on the mortgage?

If it's exceptionally low (e.g. BofE +0.25%), and you're disciplined, you may be better off funding a cash ISA or regular savings account with the money.

But the concept of putting more money to one side, either through debt reduction or saving, makes sense.

rosegirl36

Thanks for the replies,the interest rate is 2.5%

opinions4u

rosegirl36 wrote: »

Thanks for the replies,the interest rate is 2.5%

While you could find an ISA paying slightly more interest, it probably isn't worth the hassle for an extra 0.2% or so.

I'd pay of the mortgage debt (or place it in an offsetting account with IF, if there's one linked to your mortgage, for more flexibility should you need the funds in future).