Dfw-mfw. Best way to achieve this quicker.

andys15

Hi. I have been servicing high debt for about 12 months now, paying £3300 a month. I have 7 months to go.
I fixed my mortgage last December for 5 years at 2.58%. It was taken over 25 years but the plan was always to pay it of by the fixed period. December 2020. I did this to rid me of the debt quicker. All my debt is 0% and will be until completion.
Doing a snowball it says I will achieve debt and mortgage clearance in 53 months.
Obviously as a high debt person for a long time ( debt run up on extensions, renovation etc etc), I have never really had the habit of saving. I am great at shifting debt, but clueless on saving.
Any tips on best way? Should I overpay my mortgage each month until I get to the 10% limit?
I have a wife, 1 child of 15 and one child of 19 going to uni in sept, but currently working full time. ( thinking ISAS). My wife and I are both 40% tax payers although my income has just passed the £100 k barrier. Both pay pension via salary sacrifice of 6%.

Many thanks.

Andy.

andys15

Sorry I mean 58 months.

andys15

The main reason for the question is currently my date being mortgage free is March 2021 and I would like it to be December 2020. That's about £15k. What is the best way to save and overpay etc to get the highest amount of interest to knock chunks out of that £15k.

LadyGnome

You can earn £500 of interest tax free (40% tax payer, it's £1000 for a 20% tp and 0 for a 45% tax payer). So you could look at locking some money away in the higher interest savings accounts rather than ISAs. So you and your wife could earn a £1000 of interest a year tax free outside an ISA. If you don't have a lump sum then some of the regular saver accounts might be good especially if you are in the habit of paying out regular sums each month anyway.
You do need to be careful to stay within your £500 limit because over £100k the Gov't starts to remove your tax free allowance (-£1 for every £2 you earn) so the marginal tax rate at just over £100k is very high.