Really, really stupid question

pinkteapot

We are saving up as in a few years time (about 5) we want the option to move to the Lake District, and houses are bl&&dy expensive.

To date, after buying our house last August and putting down most of our savings as a deposite, we have resaved a nice pot of savings to cover emergencies and then switched to overpaying the mortgage.

Because we are saving up for a future house, does it make any difference if our 'savings' go into cash savings or mortgage overpayments? Obviously if we were saving up for something other than a house (nice new car or similar) we'd save in cash rather than house equity. But since it's to sell up and move, it doesn't matter which we do, right? When we sell we'll have equity in our current house plus cash to put down on the next house. So £2k into savings is exactly the same as £2k overpaying and increasing our equity...

I know it's a stupid question but I have that feeling like I might be missing something. :rotfl:

Eating_Daisies

Hi PTP, I might be wrong too but I'd agree with your logic. The only thing I might suggest is to have some cash for moving costs - movers, solicitors, etc.

The only other comment being are you paying more interest on your mortgage than you could gain on your savings?

pinkteapot

Our mortgage is currently only 2.49% (tracker) but due to complete laziness about shopping around for savings rates we don't tend to earn more than that. We do regular savers that pay 8% but we can only save £3k per year in them. Everything else is earning peanuts.

dimbo61

Having a good savings pot built up can save time and money when you come to move!
Having a 10% deposit in cash! money for surveys,searches,legals ETC can all smooth the way
You should get 3% plus from ISA,s ( cash )