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Overpayment on Help to Buy mortgage vs. saving for to repay equity loan
jmmyers89
Posts: 4 Newbie
Hi
In September, my partner and I bought a flat using the government help to buy equity loan scheme. We got a 3yr fixed rate mortgage at 3.24% which allows for up to 10% overpayment per year.
When the fixed term on the mortgage expires, we want to repay the equity loan, which is at current market value 56k, and take out a standard mortgage that would allow us the flexibility to rent it out in future.
But I can't get my head around whether it is best to overpay on the mortgage or save for the equity loan in a savings account. We are both higher rate tax payers so don't get a brilliant return on any savings.
What should I be considering here?
Thanks in advance!
J
In September, my partner and I bought a flat using the government help to buy equity loan scheme. We got a 3yr fixed rate mortgage at 3.24% which allows for up to 10% overpayment per year.
When the fixed term on the mortgage expires, we want to repay the equity loan, which is at current market value 56k, and take out a standard mortgage that would allow us the flexibility to rent it out in future.
But I can't get my head around whether it is best to overpay on the mortgage or save for the equity loan in a savings account. We are both higher rate tax payers so don't get a brilliant return on any savings.
What should I be considering here?
Thanks in advance!
J
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