Overpay or save?

dimbo61

that ties up your money for 4 years when you might need it sooner

Lokolo

kriss_boy wrote: »

Changed my mind again and just set up two ISA's for myself and my mrs.

Do you think theres any point in getting one of those fixed term, 4 year savings accounts with no withdrawls. You can get about 5% but Id only be putting in possibly as little as £100 a month...

Can you find me a fixed rate product which allows multiple deposits over a period?

You get 2 types of longterm fixed products;

- Those that only allow one deposit
- Those that allow deposits until the product is withdrawn (which usually occurs quite quickly if its a good product, and advertised on MSE!)

Thrugelmir

kriss_boy wrote: »

Do you think theres any point in getting one of those fixed term, 4 year savings accounts with no withdrawls. You can get about 5% but Id only be putting in possibly as little as £100 a month...

An expectation of sub 5% mortgage rates in 4 years time is fairly optimistic.

is_the_kettle_on

OP, I have a more average(expensive) mortgage, in terms of interest, and even with those more expensive terms I wrestled for ages on the overpay or save dilema. For me in terms of dollars and sense I should overpay, like the MSE guide says, BUT loosing all my savings to reduce my interest bill only deprives me of access to money that could be used to, fund unemployment, buy another house or indeed overpay when mortgage interest really goes up. One savy member suggested I was in a small way taxing myself to keep all my cash accessible. Of course an offset mortgage is one way to have your cake and eat it but this is not an option for me currently.

So if I was in your position (which looks pretty comfy) I would pay nothing extra off the mortgage and instead put my savings work.

Gorgeous_George

Thrugelmir wrote: »

An expectation of sub 5% mortgage rates in 4 years time is fairly optimistic.

Do you think the ConDems will improve the financial situation that the world finds itself in so much so that rates will be able to return to normal? I don't.

Slash and burn = less jobs = more repossession = more toxic debt = back to 2008 = low interest rates to inflate the problem away.

We're in this together - bolx.

GG

is_the_kettle_on

...and there is also the concern that massive falls in house prices will erode all the equity you have used your savings to buy. In a more stable environment equity is I suppose, a harder to liquidate asset, but it's still an asset....but if your house falls in value that money is gone for as long as it takes the house price to recover.
If a house price crash suddenly puts my equity at minus 20% but I still have 50k in the bank I feel like my position is better than if I used those savings to shore up equity to only minus 10% (sorry if there is an easier way to demonstrate negative equity) So this way if it all goes completely to h*ll and I had to ditch I should still have my savings....right?

kriss_boy

I suppose the interest I gain on my savings is somewhat irrelevant as realistically Id be surprised if my partner and I save 5K each this year.

Its more about finally getting some money in the bank.

In the last 12 months we've spend about 10K on 2 cars and a holiday. I cry myself to sleep thinking that the money could otherwise be sitting in my bank account right now...

ess0two

kriss_boy wrote: »

I suppose the interest I gain on my savings is somewhat irrelevant as realistically Id be surprised if my partner and I save 5K each this year.

Its more about finally getting some money in the bank.

In the last 12 months we've spend about 10K on 2 cars and a holiday. I cry myself to sleep thinking that the money could otherwise be sitting in my bank account right now...

One life,live it

LillythePink

kriss_boy wrote: »

I suppose the interest I gain on my savings is somewhat irrelevant as realistically Id be surprised if my partner and I save 5K each this year.

Its more about finally getting some money in the bank.

In the last 12 months we've spend about 10K on 2 cars and a holiday. I cry myself to sleep thinking that the money could otherwise be sitting in my bank account right now...

here's a tissue!

Don't beat yourself up about spending some money and not saving it - life is for living as well - you seem to be in a good financial position and thinking about the future is good but so is thinking about how you live now and enjoying it as well.

How old are you/partner?