Overpay mortgage or save for new house?

[Deleted User]

We currently owe money on our mortgage with about 20 years left, I have just got a new job that will allow significant overpayments to the fact I could have it paid off within 3 years and save £70,000 in interest.
However we are now looking at moving next year and not too sure whether to overpay our existing mortgage or too save as much as possible towards our next home.
What would you do?
Overpay or save for a big deposit?

dimbo61

I would check if you are allowed Unlimited overpayments
I would then look at the interest rate I pay on the mortgage and the best TAX free ISA,s I could find.
Now you can only save £5460 EACH per year in a cash ISA
If you overpay you save the interest rate TAX FREE!!! so if you are a higher rate Tax payer ?
I have overpaid for the last 7.5 years and saved about £75,000 in interest payments and working hard to be Mortgage Free
Me I would save into an ISA to pay fees, legals,surveys etc and overpay the mortgage as much as possible UNLESS you are on a silly tracker of 0.5% about BASE

bigadaj

If you are moving within a year then benefits of overpaying are limited, in general a good idea but if moving next year I'd keep it as liquid.

northerner999

The larger your deposit then the greater your options for moving house

ValHaller

northerner999 wrote: »

The larger your deposit then the greater your options for moving house

Deposit does not come into it after being a FTB. It is equity which matters. Equity can be held in the existing property or as savings, it makes no odds. Just make sure you have some cash to cover upfront costs, but put the rest in savings or pay down the mortgage, taking account of tax relief and overpayment limits to get the best interest rate.

ch3101

You will earn barely any interest on saving.

Over pay and save the interest for a year.

It will also show the mortgage provider how much you can actually pay every month