Overpayments waste of time/money???

lauren565

Thank you very much. I appreciate that.

kiddakidda

kiddakidda wrote: »

You shouldn't do that to yourself. You are in a good position with a very healthy LTV, and being able to pay off £500 PM in overpayments..................... !!

I'd sleep very easy if I was you.

In terms of interest rate rises and not being able to get a deal as good as what you are on at the moment.......?

That may well be the case but that is totally out of your control and all you can do is prepare yourself for the fact that your payments may well go up.

If you have 500 pm available for overpayments currently and around 52% LTV you will still be in a more comfortable position than most.

lauren565

Hi its 3.24% at the moment. Then their SVR is 3.99% after that (May 2014) provided that they dont increase the SVR before that point or even after that point !

Thrugelmir

lauren565 wrote: »

oops sorry my ltv is 57%. But it will be 52% by april!

60% LTV is the lowest threshold of any significance. As below this level lenders don't offer better products.

kiddakidda

As you say, you still have a long way to go before you will be in a position to consider re mortgage anyway (7 Months). All you can do is start looking at deals /speak to a broker about late Feb / March time in preparation for the end of your current deal. A 52% LTV will attract some of the better deals in the market at that time.

Good luck and try not worry until closer to the time.

dimbo61

If you print off your payment history with your current lender you can prove to any new lender that not only can you afford the normal mortgage payments on your mortgage balance but also overpay by £6,000 a year :-)
We had an offset mortgage with YBS for 9 years and overpaid every month and have recently moved to Barclays/Woolwich offset tracker.
Chelsea and other lenders do Offset trackers and fixed deals.
You might want the help of a broker to find a deal to suit you

lauren565

Thank you very much! Some great advice and very fast responses. THANK YOU !!!!!

getmore4less

given your uncertainty over what overpayments were doing,

what makes you think an offset is the right product for you?

They are often not the most cost effective option unless you can or need to make use of the features.

SavyMe

I've been looking at something similar, trying to work out whether it's best to overpay or offset or not. It hasn't been easy, but I think I've convinced myself that offsetting will give me the flexibility I need and a comparative cost. (safeguarding in case I need the cash quick, as I'm not sure about job security!).

In the end I ended up with FirstDirect, as they're current account is ace too!

Hope you find something (I'm sure you will with that LTV!)

beefturnmail

Making overpayments are never a 'waste of money' - they reduce the balance on which interest is calculated meaning you pay less interest.

However if you can find a savings account paying a better rate of interest than your mortgage, then it is more advantageous to save the money there instead is the interest earned will be more than the reduction in interest had you overpaid.

Actually, it can be more advantageous to place the money in a savings account paying a slightly lower rate than your mortgage, as money in the savings account is readily accessible, whereas once used to overpay a mortgage it's 'gone' in the sense you can't re-access it at a later date (without, of course, applying for additional borrowing). How much lower depends on how much you value this 'liquidity'