Should I pay off my mortgage? Discussion area

tunstallted

Are mortgage payments counted as part of your overpayment allowance??

Veld47

My question is by how much should I overpay? The more the better? Should I reduce the payments or the term?
Currently I have just started overpaying by 10% but my mortgage company said I can overpay up to £10000 over the year if I want with no additional fee. I have one year left on the fixed rate.
Currently I am also paying off an interest free credit card, into an ISA and premium bonds (as easy access to cash). Wondering if I should continue to have savings in different places?

Thanks in advance for your advice.

ruralrob228

I Will try to explain our situation as clear as possible so hear goes.

We have an Endowment policy which matures in 1st may 2020, it was taken out for £42.275 and we know there will be a considerable shortfall. We were in a position a few years ago to pay £5000 off it and our mortgage company advised 2 years ago that we make additional payments to clear more of the shortfall (£9000).

So we are now in the position where we currently owe today £25300 on our mortgage and having phoned the endowment company today they have said its surrender value today is worth £28450 minus £157 in fees. The bonus I would loose on final payout is 2.5% of the fund which is around £700.I have worked out we have 22 months payments left of £146 (85 mortgage and 61 endowment) which equals £3212 .So If I have worked it out correctly our policy will have to be worth at least £31500 to cover the extra payments we would be making between now and May 2020 .

I would be grateful if anyone can tell me if they think it is worth surrendering now and just clearing the mortgage today or worth hanging on in case the policy is likely to pay out a bit more than £31500.


I hope that all makes sensei would appreciate any advice given. Many thanks Rob

MigsyBigsy

Hello All,

hope you are all well.

I have a query regarding overpayment of the mortgage.

I am soon to move in with my partner and will let out my property but currenly overpaying by £100 my mortgage. Once I (hope) to reiceve income from the flat, should I increase the overpayment? I mean, what is the point? Yes, the interest of the mortgage will reduce long term, but what would be the point if I will (hope) to live with my partner?

thank you in advance

Miguel

JamesTM

Hi there, we currently have 5 years fixed 1.89 rate and 25 years term with Halifax.
Luckily we have some savings which we can put against the mortgage as a lump sum. My questions is would it be better to

1) reduce monthly payments so we can save about £100 a month
or
2) reduce mortgage loan amount

i suspect many people will point out Option 2 - but we also hoping to have a large sum of money from our parents to pay off the full mortgage when our 5 year fixed deal ends.
So does it really matter if we go for option 1 so at least we have more disposable income
or would you still say option 2 is more cost efficient?

Thanks all for your help.

Toolman2001

I have a woolwich Interest only mortgage at .59% above base rate.
Currently owe £130k with 9y 10 month left.
Also a Mortgage current account overdrawn by £27.5k for with the interest is approx £115 per month.

I have used this to buy a property for my mother.
However I am now conscious of the fact I need to repay my mortgage in 9 years.

Should I be looking to set up some vehicle to repay this or should I jut make over payments.

Thank you
Gary

Thrugelmir

If you wish to remain in the property you are going to need to take action promptly. Otherwise the amount you'll need to find on a monthly basis will run away from you. At the very least start making overpayments immediately. While you consider whether other savings options are viable.

dix31

A can overpay by upto 10%a year off my mortgage is it more beneficial to by 10% every year as a chunk or as monthly payments?

Cannyscot58

Around 15 years ago I took Martin's advice and changed to a Flexible mortgage. My current repayment rate is 0.69%. Next year my "savings pot" will exceed what is outstanding on my mortgage. Do I have to repay my mortgage at that point? My preference would be to continue to make repayments as we use this account to withdraw money for home improvements, holidays etc. The term runs until January 2031. As I cannot borrow money at a cheaper rate than my mortgage rate, could this feasibly continue for another 10 years.

Haggi21

Hi, 
I'm new to this so help in much appreciated.
I'm in a fairly lucky situation where i don't have any debt and have been over paying my mortgage for many years.
Right now, I have 40K savings and 26K left on the mortgage. Question is: Do I just pay it off and be done with it? I will occur a £300 penalty for early re-payment but I'm thinking its still worth it rather than keeping the mortgage? I'll still have emergency fund in tact and earning money to build the nest egg back up..

Thoughts and thanks....