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Which is best savings or over pay?
mummybaker
Posts: 108 Forumite
Hi everyone.
Well were looking to get a bigger house but we have little equity in this place ( worth £140k we owe 97K ) we have no savings and have an overdraft of £2.5k which were going to get paid off month on month now. It costs us a £1 per day to have it so were keen to get it paid off. However we need to also really need a bigger house so we want to over pay on the mortgage. Theres fees for doign over payments each time you recalculate so I'd be looking at shortening the mortgage instead.
Currently we pay £535 per month as our monthly payment over 21yrs
I already pay in £15 extra as a little safety net incase hubby had his wages late etc weve about 500 in over payments there right now.
I'm thinking we can afford £600 per month as a total now so over paying by 65 in total this will shorten the term to 16yrs if we did this and moved in 2-3 years will we do enough to the mortgage to have more equity? or is it better to bank the extra £50. I'm thinking if we can save on the mortgage it's best but I've never been good with figures. I shall be paying £100 per month plus the interest off the over draft too and I'm doing a bit of freelance work in August which will pay off a good £1000 too so it shouldnt take too long to clear I shall shove all i can in there.
So i guess my question is how can we make the most difference to enable us to move as soon as possible with more equity or cash? I'd be happy to stay here a maximum of 5 more years it will be really hard as we are squished but I'd like to not move to the next house having to scrape by each month to afford the repayments.
Well were looking to get a bigger house but we have little equity in this place ( worth £140k we owe 97K ) we have no savings and have an overdraft of £2.5k which were going to get paid off month on month now. It costs us a £1 per day to have it so were keen to get it paid off. However we need to also really need a bigger house so we want to over pay on the mortgage. Theres fees for doign over payments each time you recalculate so I'd be looking at shortening the mortgage instead.
Currently we pay £535 per month as our monthly payment over 21yrs
I already pay in £15 extra as a little safety net incase hubby had his wages late etc weve about 500 in over payments there right now.
I'm thinking we can afford £600 per month as a total now so over paying by 65 in total this will shorten the term to 16yrs if we did this and moved in 2-3 years will we do enough to the mortgage to have more equity? or is it better to bank the extra £50. I'm thinking if we can save on the mortgage it's best but I've never been good with figures. I shall be paying £100 per month plus the interest off the over draft too and I'm doing a bit of freelance work in August which will pay off a good £1000 too so it shouldnt take too long to clear I shall shove all i can in there.
So i guess my question is how can we make the most difference to enable us to move as soon as possible with more equity or cash? I'd be happy to stay here a maximum of 5 more years it will be really hard as we are squished but I'd like to not move to the next house having to scrape by each month to afford the repayments.
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