Is it better to pay booking fee now or make overpayment 2-3 months later?

user1168934

I have just completed on a flat about 2 days ago, mortgage is with Santander and had a £995 booking fees which I asked to be added to mortgage at the time of offer to avoid paying it should the deal fall through.
The offer document says I have an option to pay this in the next 14 days after completion. I am also allowed to pay 10% overpayments each year.

After paying for a deposit I am a bit stiff on cash and would like to keep as much with me as I can should I need it for any immediate works. I can take money out of a small cash ISA and easily pay it off though.
In a couple of months time I will probably save enough on my earnings to pay it off.

Is there any advantage in paying it off now as opposed to pay a couple of months later as an overpayment considering I am allowed to make overpayments?

(I dont plan to make any further overpayments this year at least)

Wh05apk

The sooner you pay it the sooner you will stop paying interest on it, that is the only benefit, for the sake of a couple of months you are talking tiny amounts, probably best to settle yourself down, and see how your finances go, rather than leave yourself tight now.

dimbo61

Overpay what ever you can afford to overpay as and when you have the money!
You are paying interest on this Booking fee at your Mortgage rate and I guess with ISA,s rates being very poor at the moment you are earning less interest than you pay on the mortgage BUT you need Emergency savings ( Just in case).
Build up Emergency savings of 3/6 months of Income and then overpay.
The first 6/12 months of owning a new property can be very expensive so hang onto savings and OP when things settle down

ACG

I would always say add and then overpay.
If you pay upfront and the mortgage doesnt go ahead, you lose the money (usually). If you add it and pay it off straight after the mortgage completes, it will cost you pennies.

getmore4less

The optimum is add and borrow less as long as that won't cause you cashflow issues.

user1168934

Many thanks for the advice folks. I think I will hold off for a couple of months and then pay it off.