Should I pay off my mortgage discussion

bazaoyaki

Joining this forum for the first time, I'm rather confused about mortgage overpayment. I have a HSBC fixed rate mortage (5.95%) coming to an end in MArch, which will then switch to bank standard variable rate (currently 3.94%) automatically. It also means that I'll be free to make any amount of overpayment starting from April.
Two questions:
1.Should I make overpayment as much as I can afford after April, given the current climate (low savings rate), or is it better to put it in savings (about 4%) for a period a time and make lump sum payment later?
2. In general, is it better to overpay mortgage when the mortgage is high or low? (not sure if it's a valid question, but I am just thinking whether I should save till the standard variable mortage rate goes up, and then pay a lump sum). Does that make sense?

Thanks!

sue000

I have £15,000 sitting in current account - earning very little and waiting for me to decide what to do with it. Should I pay a lump off my mortgage (tracker repayment with nationwide 3.04%) or save. New to this game and need good sound advise.

widdy1510

I have a £128k Abbey mortgage of which £65k is Interest Only, and £63k is Repayment with 8yrs to go. at a fixed rate of 5.14% till July 09. I am paying into 2 endowments which mature in 5yrs time which I hope will amount to £52k (according to last shortfall notices!) I have an inheritance of £65k which I want to use to pay off some of the mortgage and reduce our monthly outgoings (£1200 per month for mortgage & endowments). Which part would be best to pay off? and what would be the benefits? When the endowments mature in 2013 I would use that to reduce it further, but I cant work which part is best paid off Can anyone help please?:eek:

DAVE1003

sue000 wrote: »

I have £15,000 sitting in current account - earning very little and waiting for me to decide what to do with it. Should I pay a lump off my mortgage (tracker repayment with nationwide 3.04%) or save. New to this game and need good sound advise.

what i'd do is (unless you have already done this) is put some in an isa before april then some in after then pay some off your mortgage as this will be getting at least the same interest as what you are paying on your mortgage.
you never know when you might need some money in an emergency & a loan will cost you lots more.
if you have someone else in your house you could put it in their isa also.
just my thoughts anyway.
hope it helps.

mickso

Hi, we're new to this site, This is my first post. My mortgage is due to finish in Oct 2011 and I only owe £3200. I pay £106.00 per month and my interest rate is 4.9%. I have about £10,000 insavings - some of which is in an ISA. I have enough to pay this morgage off with no redemption fee. do you think it is worth it or should I leave my savings alone? The ISA is not paying the 5% it started of at I think it is only around 3% - if that . I have tried the calculator - but it doesnt really explain it to me. - sorry if this is straightforward to everyone else. !

DAVE1003

yeah i would mate,
lot of worry off your mind.
pay it out of your other savings before you start with your isa savings.
If what you owe is at a higher % than what you can get for your savings & you are leaving yourself with some emergency savings. do it asap & save yourself £100 a month.

mickso

To make matters more complicated, ive just been looking at ( thats me the wife) at an interest free offer on a £5500.00 car (over 5 years - so now I'm more confused, pay the mortgage off and have the 106 each month off the car !!

Hammerite

Right, here goes. Currently have a mortgage circa 90k. Have just come into inheritance money to tune of 95k. Mortgage term remaining is 22 years, current mortgage rate is 2.44 percent (lifetime 0.44 above base rate/collared at 2). Wife and I are basic rate taxpayers. Terms of mortgage allow overpayments of up to 500 quid a month. Paying off in total incurs early redemption fee of 2.5 per cent.
Should we (a) stick the money in a/variety of shoparound savings account provided the net interest rate, of course, is a good deal better than mortgage rate. (b) pay off the extra 500 quid pm from now until whenever. (c) pay off thwe heap and give the bank their early redemption fee. (d) AN Other (e) Go on a holiday to cure the spinning head.
Any advice gratefully accepted guys.

mags_r_ganin_down

hi all,first time on the site.
i have a 18,000 pound mortgage at 6.7%.
it has nearlly 5 years left to run.
we now have enough savings to pay it off early.
should we pay it off early?
(ps the savings are spread over 3 accounts and get very little interest.about 2% at most!)
thanks.:beer:

nettieB_2

I am new to this forum and have a question, most prob ans'd, but I get confused when we throw ISAs into the mix on offsets:

I have an offset a/c (not an offset ISA) at 5.39%. I understand if I put say £5K in there, it is more worthwhile than in my current savings a/c at an interest rate of 1.25 AER. However, when we throw ISAs into the mix & the fact I am a higher rate tax payer, it is here I get confused. Would I not be better off putting £3600 of that 5K into an ISA I have found at 3.51 or is it still better off in my offset? Naturally I understand I am missing out on the LT benefits of my ISA, but what about now, the Short term?