over paying a mortgage-advice please

de1amo

i currently have a 55k mortgage/92 pounds a month interest only payment(1pc)--i am 47 and have a term of 17 years left and i am looking for the best way to go.--i can over pay by 10pc per year according to the building societies website.
Due to an old endowment maturing i have managed to save 27k in cash plus i have a home and business abroad so i am 'equified' well past the 55k and have a solid income base both in the uk and abroad.
i am deliberating the question whether to up my payments on the mortgage or just carry on 'doing' what i am doing--ie saving for the end of term --as a note i keep my uk and foreign incomes seperate presently but abroad i can get about 9pc on savings.

blueberrypie

If you can earn interest on your savings at a rate that is higher (after tax) than the interest rate on your mortgage, it makes more sense to keep your savings as savings.

If the interest rate on your mortgage is higher than you can earn on your savings elsewhere, it makes more sense to overpay your mortgage as much as possible.

Note that the overpayment limit usually only applies during the initial part of your mortgage (often between one and five years) - once past that, you can overpay as much as you want without any early repayment charges.

de1amo

i have been with my mortgage holder for at least 5 years but 1 part of the mortgage was taken 3,5 years ago--so from what your saying i am at liberty to pay as much as i like on the original part but 10pc on the more recent?
i am receiving 60 quid a month by using vantage with lloyds --the 27k--i just realised i could access setting up new accounts because i am abroad now

blueberrypie

It depends on the terms of your mortgage. It's highly likely that you're free to overpay as much as you want on the original part. For the other part - was it taken on a fixed-rate deal? If so, how long did the fixed-rate last?

All of the information should be on the Key Facts Illustration you'd have received when you took out your mortgage.

But again, if you can earn interest at a higher rate on savings, it doesn't make sense to overpay the mortgage at all.

de1amo

the problem with being abroad you just dont have access to information-it un-nerves me a little to build up cash in easily accessable accounts because i am married and a wife's needs are many!! --locking it down in the primary reason for saving- the mortgage- takes temptation away!!----my wife is not a big spender but there is always something i feel 'she' needs--just had new bathrooms and kitchen abroad.--i will start looking about in my uk place and thinking its not up to 'standard'--its in the back of my mind whether home improvements in the uk are still reflected in the final sale price under current conditions??

LilacPixie

OP - in my experience they are not. I recently did my bathroom and kitchen only 3 years old with integrated appliances. My place was advertised the exact same as similar property a few streets away needing total modernisation. Admittedly My place has had considerable interest but no idea if similar property has had the same.

de1amo

kinda puts sarah beanie and crew out of work!!--i have been mostly out of the uk for 4 years and changes in that time have been so dramatic in the housing market--i am still watching 'changing rooms' with flowery boarders!--some of the threads here seem reminiscent of post war time with people thinking of growing their own veg and heating their houses with coal or wood--seems the noughties were the 80s revisited!

de1amo

i am well out of any fixed terms on both a and b parts of the mortgage--