Are my mortgage payments correct?

JimmyTheWig

Danno81 wrote: »

Even if my first question was misplaced, it has made me more determined to pay off the maximum 10% every year.

I aways knew it was better off the mortgage than in savings.

It just depends on the comparative interest rates. If you're paying 4% interest on your mortgage then the chances are you won't get this (especially after tax) on your savings so it is better to pay it off the mortgage if you can without penalties.
But people on low rate mortgages (e.g. trackers taken out when the base rate was high) should be able to get better interest from a savings account than they are paying on their mortgage so it makes sense for them to keep the money in savings.

It appears especially true early on in the mortgages life.

Only because it will then have a long time to act.
Paying £1000 off a mortgage at 4% interest with 20 years to go will have the same effect of putting £1000 in savings at 4% (after tax) for 20 years.

The length of time accentuates the differences in the rate, though. If you are just looking at one year, the difference between 3.9% and 4.0% on £1000 is just £1. But over 20 years it's nearly £42.