Overpaying- Yes or No...?

HiZ

Hi,
I'm a newbie so :wave:

I am coming to the end of my first year of a 109k mortgage and wonder if should make the most of my over payment allowance (~£6k).

Is overpayment a 'Yes yes yes' or a 'well it depends'? I can afford to contribute about 5k from savings, leaving me enough for spare. Maybe Im better saving for a deposit for a rental property though....?

Any comments welcome.

Stewboy1978

Personally I would - My thinking is get the mortgage paid off asap.

brasso

A good way of forcing yourself to overpay is to reduce the term next time you change mortgage product. So if you have 20 years left to pay, next time you renew/change mortgage deal, ask for say 18 or 15 (or whatever you can afford) years instead. Of course, monthly payments will be higher but it's fantastic to feel that the final installment is much nearer than it was.

Personally I wouldn't consider buying a rental property at the moment. Too unpredictable. Use your spare cash to knock down that main mortgage.

MUSTBEFUNNY_2

Go over to Morgage Free Wannabe board for fierce debate on whether you should pay off your mortgage;)

1jim

I would say that you should have a savings cushion for emergencies etc, I would say that around 6months months salary would be more than adequate, if you have this then start to overpay on the mortgage with lumpsums, in the meantime whynot overpay by a small amount each month (every little helps)
This is just my personal preferance so I am sure that others will disagree
Jim

HiZ

Thanks for the responses, Im concerned that cash sat in an online savings account could be better used to pump up my ISA for this year and pay off some mortgage. Maybe better to still keep some high interest savings for a 'rainy day'. I still have decent sum in a PEP/ISA.

I will look to increase my monthly payments by say £150 for now and see how cash flow goes.

DIY is almost over so I will have more monthly spare cash available.