Mortgage thoughts??

erniefly187

I have a £60000 intrest only mortgage at 1.6 above the bank rate currently 2.1%
Through paying off another mortgage i will have approx £1400 extra a month and cant decide or work out is it better to -

a. Change the intrest only mortgage to a repayment mortgage and be able to pay that off in 4 years by paying off £1400 a month
OR

b. save the £1400 a month = £16800 a year and just use that sum each year to pay off the lump sum of £60000.

I appreciate rates can change etc etc.
any advice be greatly appreciated.
ernest.

getmore4less

save if you can find a rate greater than 2.1 after tax.

if not overpay don't go to repayment that commits you to the higher payment.

LilacPixie

if it was me I would be filling an ISA, Opening 2-3 regular savers (lloyds 5% gorss) and saving the cash to make a lump sum payment. If you can get savings accounts at a rate higher than mortgage rate (after tax) then saving it has to be.