Time to pay more...

Hi folks
I've been reading the boards for quite a while 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
Ps, I posted this on another board but it was suggested I move it here.

Replies

  • resilieresilie Forumite
    179 Posts
    How much you need as your emergency fund depends very much on personal circumstances- how safe is your job, have you got income protection insurance, have you got dependents. I'm personally quite happy with 10k but wouldn't want to be below that line.
    So if I were you (though I'm not ;-) I'd plough 14k into the mortgage and keep the rest in the savings account... the difference is only 0.8% on 10k afterall....
  • niftynewniftynew Forumite
    22 Posts
    Thanks Resilie

    I would welcome anymore views :)
  • elantanelantan Forumite
    21K Posts
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Forumite
    I agree it all depends on your personal circumstances ... With my mortgage I can overpay and claw it back if I need to so I basically keep my emergency savings in there ( I am 4.69% interest though) I think £10k is a good amount to have as an emergency fund and is a lot more than a lot of people have ... Well done :)
  • originalmiscellanyoriginalmiscellany Forumite
    1.7K Posts
    Part of the Furniture 1,000 Posts Combo Breaker Mortgage-free Glee!
    Forumite
    To echo what else has been said, I can take from my mortgage if I need to, so have ploughed everything into it, at our peak, we cleared our mortgage in super fast time by overpaying everything, chucking our savings in etc and fortunately not needing to have the emergency fund.

    So I'd stick it in the mortgage (except 6 months of emergency savings should you lose your job/fall on hard times) and keep the amount you pay the same to speed up the process even further,
    Feb 2012 - onwards MF achieved
    September 2016 - Back into clearing a mortgage - Was due to be paid off in 32 years in March 2047 -
    April 2018 down to 28.00 months vs 30.04 months at normal payment.
    Predicted mortgage clearing 03/2047 - now looking at 02/2045

    Aims: 1) To pay off mortgage within 20 years - 2037
  • LisaLou1982LisaLou1982 Forumite
    1.3K Posts
    Chutzpah Haggler
    Hi OP

    As others have said, its all pretty much independant to you - but you could try thinking about these points.

    How would you feel if your £24k savings pot was no longer there? Would you feel anxious that you didnt have a "savings" account of rainy day money? Or would you be simply happy in the fact that your mortgage was 24k lower?

    if you put half in to the mortgage would you be happy that you still had 12k in savings or would it feel too low?

    if you put 20k in and had 4k left, would it bring you out in hives knowing that there was less in the savings pot than there once was? :)

    For me, i OP a set amount monthly - currently around £150 and then i also account round too so that adds in bits and bobs throughout the month. I have 13k in my ISA plus some shares and another savings account with about 1k in. For me, i like to know that i have money in a savings account. It makes me feel safe, and i would rather keep that there than pay it all into my mortgage and then withdraw it at a later date.
    £2 Savers Club #156! :)
    Looking for holiday ideas for 2016. Currently, Isle of Skye in March, Riga in May, Crete in June and Lake District in October. August cruise cancelled, but Baby due September 2016! :j
  • niftynewniftynew Forumite
    22 Posts
    So I'd stick it in the mortgage (except 6 months of emergency savings should you lose your job/fall on hard times) and keep the amount you pay the same to speed up the process even further,

    This is what I want, I want to be MF before I am 50 so I'll carry on OP for as long as I can.

    Lisa,
    I like the way you are thinking...Yes I think it would bring me out in hives knowing I had chucked all my savings on the mortgage!!

    So I have decided to plough 14k on the mortgage and keep This years ISA allowance tucked away and hopefully not need for a long time and the remaining 4k I will keep in a savings account (just to feel a little bit safe)

    Thanks again
    Niftynew
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