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Saving a deposit- Isa or overpay current mortgage?
Sooty1982
Posts: 1 Newbie
Hi
My house is up for sale and i am currently saving all my disposable income in order to build the biggest deposit possible for my next move.
What I want to know is: should I save into an isa or increase my equity by overpaying my mortgage? I'm conscious my mortgage rate is higher than my savings rate, which would point to overpaying mortgage. however if i pay my mortgage off my cash deposit will be trapped until i sell. My house may take another 3 years to sell and i may want to consider alternatives by then such as renting my house out and buying another, or part exchanging. if i tie up my deposit by overpaying wouldn't it make it harder to get a buy to let mortgage? And if I overpay and end up with a lot of equity in my home, will a builder will think I'm loaded and offer a low part ex price for my house? What should I do?
My house is up for sale and i am currently saving all my disposable income in order to build the biggest deposit possible for my next move.
What I want to know is: should I save into an isa or increase my equity by overpaying my mortgage? I'm conscious my mortgage rate is higher than my savings rate, which would point to overpaying mortgage. however if i pay my mortgage off my cash deposit will be trapped until i sell. My house may take another 3 years to sell and i may want to consider alternatives by then such as renting my house out and buying another, or part exchanging. if i tie up my deposit by overpaying wouldn't it make it harder to get a buy to let mortgage? And if I overpay and end up with a lot of equity in my home, will a builder will think I'm loaded and offer a low part ex price for my house? What should I do?
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Comments
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It's pretty much always more efficient to pay off a debt than look for interest on savings. Your money will go further paying off your mortgage.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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Why would you home take 3 years to sell ?
Do you need to spend a small amount of money doing improvements to the property in order to help sell ?
You may also need money to pay for legals, searches, surveys etc when selling and buying.
If you have a large amount sitting in a savings account earning a very poor rate of interest then you might consider overpaying the mortgage0
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