Is it better to pay off more in the beginning or at the end?

cusssi

We may get a mortgage of 2.99% fixed 5 year deal for a mortgage of £96000 over 25 years.

Predicting that the rates will go up in 5 years time.

Do we save more money in interest by overpaying whilst its 2.99% for every month of the first 5 years or by overpaying the same amount for the second 5 years at a higher interest rate?

Just trying to get my head round the maths?

Thanks

HappyMJ

If you can find a savings rate that pays a net rate of 3% or higher possibly by investing in the name of a partner who isn't in employment and therefore not paying tax then save as much as possible then once the mortgage rate exceeds the savings rate then pay any of the accumulated savings all off the mortgage. If you can't find a good savings rate then pay any excess income off the mortgage as soon as you can and you'll save more. There is a balance though as you need emergency savings so I'd suggest keeping about £6k in savings accounts before paying any extra of the mortgage. If you ever want to buy another property you will have some savings to put towards a deposit and costs without having to sell to release the funds first.

getmore4less

simple
3 rules of borrowing

borrow as little as you can,
for the lowest rate you can,
for the shortest period you can.

there are some optimization when you can lend for less tha savings eg 0% CC or penalties.