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When to make lump sum overpayment?
PrincessLou
Posts: 503 Forumite
We have a HSBC mortgage, currently on a 2 year fixed at 2.49% interest. We currently pay the maximum overpayment monthly (20% of our monthly payment) but I am considering a £800 overpayment at the end of the year. This will however incur an early repayment charge - I think this should be no more that £20 for this amount.
My question is, is it better to pay the £20 charge and make the overpayment or to hold on to the money for 22 more months and pay it off then? How do I work out how much interest I would be saving over 22 months by paying off £800? I'm really bad at working this out so could do with a little help...
Any advice much appreciated!
My question is, is it better to pay the £20 charge and make the overpayment or to hold on to the money for 22 more months and pay it off then? How do I work out how much interest I would be saving over 22 months by paying off £800? I'm really bad at working this out so could do with a little help...
Any advice much appreciated!
Mortgage - £105,500
0
Comments
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Where would you put the money if you did not overpay? say a cash ISA!0
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You can earn than 2.49% in interest on the £800 so hold on to it.0
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