Is there any point in overpaying my mortgage?

daviesalie_2

I find the mortgage overpayment calculator very inspiring. Play around with some figures and you'll see how much you could save.
http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

ultrarunner

With 90 years on the lease thinking about a lease extension might be an idea

orcocan

have you considered downsizing? sell your flat while you still have a long(ish) lease and buy somewhere else that is more affordable for you, ideally so that your equity is sufficient for a 20% deposit...

ValHaller

Brallaqueen wrote: »

Thanks for your input everyone. So the fact that the flat is leasehold doesn't have any impact on the decision? That's where he was coming from - with a house it would be differentI guess.

He is right that being leasehold makes a difference, but his approach is radically wrong.

With any property you need to think about whether you will need to exit from it and how you will exit. With mortgaged freehold property, it is straightforward. You put the property on the market and you sell it - you get back the value of the property adjusted for inflation and pay off the mortgage.

In the case of leasehold property, someone has paid for the right to the property for 99 years or whatever and the value decreases as that time passes, sort of like a back to front and upside down mortgage. At some point, the property becomes unsaleable, because the lease is too short to be mortgageable.

So you have 2 issues to deal with - paying off the mortgage and making sure that the lease will be long enough for you to sell on if you need to move. You do have rights to extend the lease and it is cheaper if you do it earlier - but not worth doing if you are planning on moving sooner rather than later - and maybe not worth doing if you know you are not moving and the lease is long enough to cover you till you eave feet first.

On the whole paying down the mortgage is a good thing - but if you might need to extend the lease, you could plan to do that rather than lock the money up in a paid off mortgage.