Nationwide Overpayments

fraggleKFC_2

Hi all, I have recently been moved onto the Nationwide BMR of 2.5%. I am thinking of setting up a standing order to overpay £200 per month-approx what I am saving with new rate.

Is this wise? Also, I have a few thousand in a current account, would it make sense to plough this into the mortgage as well?

Any advice appreciated,

Thanks

GMS

If your payments have dropped then it makes sense to keep the payments the same as they were as this can potentially save you a lot of interest and/or time on your mortgage. Make hay whilst the sun shines and all that.

Having money in your current account paying next to no interest is better utilised clearing a debt which costs you 2.5% in theory but if you have no other savings then consider what would happen if you needed money for an unexpected problem. If it meant you would need to borrow at 8% for instance you may wish you had kept the few quid for a rainy day rather than clear mortgage.

Overpay as much as you can per month. You will be amazed at the impact it has