Mortgage overpayment question for FTB

sterl1ng

Hi, If you have a mortgage whereby interest is charged daily how is it best to overpay? I was looking to top up each month but then thought to save it up in my 3% current account then at end of year, along with interest top up my mortgage as its rate is only 2.74% but not sure how the interest would work if its daily that i'm charged? I even thought if I should just pay top up daily or is that just mad? No idea what I'm doing here, hoping for some guidance. Thanks :T

Thrugelmir

Majority of mortgage accounts now have interest calculated daily and charged monthly. Overpay when your salary is credited to your bank account.

Remember to have cash reserves in case of emergencies. No point in overpaying and leaving yourself with no savings. Which then requires you to borrow at very high rates.

Don't expect overpaying to show noticeable results quickly. Paying down your mortgage is like picking pebbles up on a beach.

sterl1ng

Thanks, that was the plan so once I get paid I'd top up mortgage, as well as top up my 3-6mths emergency fund, which would be in my 3% current account.