To pay or not to pay....

niftynew

Hi folks
I've been reading the boards for quite a white now, some very interesting topics and the one that caught my eye a while ago is the mortgage free wannabe!

I have a couple of questions
I have approx 24k in savings which sits in a 2% account.

My mortgage is 114k which costs me £570pm (tracker @ 2.89% but I over pay by £430 rounding it up to £1000 pm to get it paid off in about 10 years instead of 23!

I'm thinking of using my savings to reduce the mortgage total to £100k and continue to overpay trying to reduce it even more.

The advise I'm looking for is should I pay a bit more off the mortgage bringing it down to approx 90k and start saving again (£200pm) or is having about 10k enough for unwanted emergency's

Just looking for other people's thoughts?

At the moment I have no plans on using the money for anything else and I don't really want to let it dwindle away on rubbish.

Cheers
Niftynew

Tiglath

I'd look to have 6 months' living expenses as an emergency fund in case anything happened jobwise. If there's anything left after that, I'd definitely look to reduce the mortgage.

niftynew

Thank you Tiglath
Would love to hear some other views on this.

geoffky

Always have 6 months mortgage payments in reserve...I would use the rest to pay some off the mortgage but will they take a lump sum?

niftynew

Hi Geoffky,
Yes the mortgage is with First Direct and they allow as many over payments as you want without a penalty.

sugarplum10

i agree with all the above posts, keeps reserves just in case so 6 months mortage payments and maybe a bit for living expenses/ emergencies- you never know, otherwise over pay! if you post this on the mortgage free wonnabee board you may get a better response as they are far more knowledgeable in this sort of thing and will give you a better evidence base for their answers!

niftynew

Thank you, I have moved it to the other board.