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Keep money in savings, or overpay mortgage? BUT house move on the horizon.
Sponge
Posts: 834 Forumite
As things stand:
I have an £84,000 mortgage with Santander. I'm 5 months into a 4 year fix @ 4.49%.
I have £17,000 in savings with Lloyds TSB, but their interest rate is due to fall on the 27th June. So I'm thinking about moving the money to Santander's eSaver account which receives 3.0% gross and instant, penalty-free access.
I am to be gifted £10,000 in approx. 18 months.
Our house is on the market @ £125,000.
I'm looking at a houses in the region of £145-165,000.
As I'm going to have to borrow some extra money for the move, I paid Santander a visit last week and the mortgage advisor has confirmed extra borrowing is available; more than likely on their BR+2.49%, 2 year tracker, £0 booking fee, free valuation & £250 cashback product.
The thought was to get this extra borrowing on an interest only option and to use the £10,000 gift to clear/reduce this part of the mortgage.
However, as I don't know how long it'll take to sell my house/find a new one, I'm wondering if I'd be better using the current £17,000 to overpay my fixed rate mortgage (4.49% > 3%). I think I'm allowed 10% per year overpayment, but I'll need to confirm that.
Come the time I do have to ask for extra borrowing to enable the move, will it make any difference to my overall position if I've gone down the reduce-my-fixed-rate-mortgage route, rather than keep it in a savings account waiting for D-Day?
I have an £84,000 mortgage with Santander. I'm 5 months into a 4 year fix @ 4.49%.
I have £17,000 in savings with Lloyds TSB, but their interest rate is due to fall on the 27th June. So I'm thinking about moving the money to Santander's eSaver account which receives 3.0% gross and instant, penalty-free access.
I am to be gifted £10,000 in approx. 18 months.
Our house is on the market @ £125,000.
I'm looking at a houses in the region of £145-165,000.
As I'm going to have to borrow some extra money for the move, I paid Santander a visit last week and the mortgage advisor has confirmed extra borrowing is available; more than likely on their BR+2.49%, 2 year tracker, £0 booking fee, free valuation & £250 cashback product.
The thought was to get this extra borrowing on an interest only option and to use the £10,000 gift to clear/reduce this part of the mortgage.
However, as I don't know how long it'll take to sell my house/find a new one, I'm wondering if I'd be better using the current £17,000 to overpay my fixed rate mortgage (4.49% > 3%). I think I'm allowed 10% per year overpayment, but I'll need to confirm that.
Come the time I do have to ask for extra borrowing to enable the move, will it make any difference to my overall position if I've gone down the reduce-my-fixed-rate-mortgage route, rather than keep it in a savings account waiting for D-Day?
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