A years mortgage challenge

Maximum_Saving

From June this year until June next year I will try to pay off my mortgage. Today my mortgage went to just below £20,000. When my regular saver ends in December 2016 I will be able to pay off even more of my mortgage by paying a 5% fee. Then my mortgage will jump down to just £9000. I will keep on paying my mortgage until June 2017. I will pay it all off on 12th June 2017 by paying another fee.

ceredigion

How much is your mortgage rate?
How much is your savings rate?

Maximum_Saving

I have got a Regular Saver with First Direct and it will pay 6% interest. It ends on 29th November 2016. It will by then have £3600 plus £117 interest. Right now I have £2100 in my Regular Saver as I pay in £300 each month.

My mortgage has an interest rate of 4.09% and I began this 5 year fixed deal in September 2012. Until it ends on 31st August 2017 I will face a 5% fee if I overpay more than £500.

ceredigion

well in that case I think id be more inclined to take the money from the regular saver when that matures and put it in a combination of TSB and Nationwide accounts, paying 5%. Use that money to drip feed that back into your regular saver paying 6% and continue to save your £300 a month into these accounts. The interest you are gaining is more than the interest being saved if you pay off the mortgage. Given the fact that there is no tax deducted on your savings interest now , why pay the 5% fee to over pay your mortgage.

Maximum_Saving

I also had a First Direct Regular Saver from November 2014 to November 2015. When it ended I took the money and put in a TSB Classic Plus Account. I also opened up a TSB Monthly Saver. Both of these have 5% interest.

ViolaLass

I think you may be on the same mortgage deal as me, in which case the ERC is 1% in the final year, not 5%.

Maximum_Saving

I hope that I am on the same mortgage as you then. If the ERC is 1% in the final year it will be more affordable for me.