Over payment

slbs2009

Hello,

I'm just after some help, I currently hold a nationwide mortgage fixed for the next 3 and a half years at 3.69%

The balance at the moment is 106,000 with 27 years remaining.

My monthly payment is £522 and I currently over pay the max which is £500 without any penalties, I've just spoke to nationwide and they've said if I want to overpay an additional £500 the fee is £50 a month which will be added to the balance.

My question is, shall I save this in a 3% saving account or would it be worth me paying the penalty and reducing my mortgage a lot faster.

I'm a 20% tax payer.

Many thanks in advance.

edinburgher

Another idea.

If you can afford to pay 3x your monthly mortgage payment, why not ask them whether or not they will charge you to reduce the term? Something like 11 years should do it.

That way you could increase your monthly payment (say to the £1k or so you're already paying) and then make additional OPs as you can afford?

I cba with OPs, we just reduce the term. 25 years in 2012, now down to 16.5.