Having a dumb blonde moment!

wendyloub

Ok having finally decided on a mortgage rather than a loan, and getting the totally fee free flexible on I wanted, I have borrowed 14k to pay back over 10 years, its a tracker mortgage, the interest rate 2.59% from memory, my intention was to pay every penny I could into it, to get it paid off in three years, buuuuuut I have a savings account where I get 3.15% so would I be better to save the money or pay it off my mortgage?

Once I've paid my ex his 25k payoff, from my house I'm bitter as hell lol, I'll be left with no savings so is it worth saving or paying??

I've drunk wine so am a little befuddled lol

holly_hobby

Traditionally the basics of financial planning are to reduce your borrowings before investing, as you will always incur a higher interest rate on debt than savings.

That was until recent times .... what I would say is if your NET savings rate equates to more than 2.59% (or whatever your mge rate moves to), I would use the accumilated interest to made some lump sum repayments off your os mge, until the rates switch priorty, and then use the savings to repay the mge or reduce according.

Sure others will be along with comment.

Re your ex - small price me thinks, for freedom to drink wine and be on MSE at the same time !! :j (I've a large glass of red by my side ... so cheers (I'm allowed tis Friday after all ...!!!)

Hope this helps

Holly

anselld

3.15 after basic rate tax becomes 2.52 so unless you are a non tax payer you will be worse off by saving.

holly_hobby

anselld wrote: »

3.15 after basic rate tax becomes 2.52 so unless you are a non tax payer you will be worse off by saving.

Unless of course its ISA based.

H

dimbo61

I would build up savings after you have paid EX his share until you have a good emergency pot!
Say 3/6 months of income at the least

getmore4less

I would have borrowed more to make sure there was an emergency/disaster fund.

With a 3 year payoff plan the cost of an offset would have been worth the flexability .

Emergecy fund 6m-1y expences depending how long you think it would take to get another job.