MSE News: 'Decrease the term or overpay my mortgage?' – Martin Lewis answers



  • kedi7uk
    kedi7uk Forumite Posts: 24 Forumite
    The key ones for each share will be.

    How is the share calculated.
    What are the costs of purchasing a share.
    What happens to any rent.
    Any other T&C change, like who you can sell to.

    IF it costs money to buy a share then you may want to consider fewer purchases.
    if the values is based on current and it is going up buying sooner may be better.

    The shares are calculated on current market value so will go up as the house prices rise and vice versa.
    There are also charges for buying a share (valuation, admin fee, solicitors fees etc)
    The cost of rent goes up annually by RPI+1%
    Obviously buying shares means the rent will go down because you only pay on the share you're renting.

    If I use the lump sum to overpay the mortgage I will then need to take out another mortgage in the future when I want to buy other shares in the property.

    I guess this is where I struggle. How can I compare the money saved on overpaying the mortgage against buying another share when that means costs and another mortgage.

    My logic seems to say owning a bigger share is good, but I'm not sure whether it's better to pay toward the current mortgage or keep paying that and buy another share outright.

    I'm currently on the Halifax variable of 3.99% with little to no chance of remortgaging as I'm newly self-employed so don't have 2 years of financials.
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