I'm in a Muddle... To Save or to OP?

WhenIGrowUp...

Query no longer applicable.

dimbo61

Yes build up savings in a cash ISA as you should get at least 3% which is more than you are paying on your mortgage.
After you have used your ISA allowance then overpay the mortgage by the £500 allowed each month.
You are allowed to offset the interest you pay on your property against your tax bill from renting out your house but you will need to look at your options in November 2013

financialbliss

Hi WhenIGrowUp,

Think you already know that at 2.5%, you're not going to get a better standard variable rate. I'm about to drop onto this rate too!

On the Nationwide BMR there is no overpayment limitation, so unless you meant that you could afford £500 per month, you're free to throw as much as you want at the mortgage.

Do you have a repayment vehicle on this mortgage, or have you considered switching to repayment?

You should be able to beat the 2.5% with savings, so building up a savings pot seems like a good idea. I'll re-read this evening and post further if I can think of anything.

Financial Bliss.

WhenIGrowUp...

Query no longer applicable.

dimbo61

You have 32 months left on the Nationwide BMR left and if you can afford to build up savings of £500/600 a month in ISA,s regular savers and overpaying you may well have built up enough equity ( by paying a lump sum off ) to get a BTL interest only mortgage or stay on a deal with Nationwide.
You need to get the LTV below 75% but as you can offset the interest against the profit I think you are better off saving rather than overpaying.