Overpaying mortgage

jhyt89

Should I overpay if I am planning to sell my new place in 4 years time. Or should i save that money.

[Deleted User]

Depends. .

LadyGnome

Hi
Nobody can answer that on the information given. Here are a few questions that might clarify your thinking:-

1. Do you have an emergency fund / rainy day savings. If not they are a priority over overpaying.


2. What are you planning to do in 4 years when you sell your property? If you are going to buy another property then saving towards the cost of moving and stamp duty might be a better idea.


3. What is the interest rate on your mortgage? If it is reasonably low then you might be better sticking your money in a high interest account or two as the interest on that will be higher than your mortgage interest.


4. Is your mortgage rate fixed and what is your LTV? If you are on a two year fix and can pay down enough to get into the next LTV bracket e.g. 80% down to 75% then you might get a cheaper fix next time.


5. Are you the sort of person who can save or do you tend to splurge any spare money? OP the mortgage might be safer than saving if money burns a hole in your pocket.


6. Do you have any other major costs coming up in the next 4 years e.g. course fees, holiday, wedding that you need to save for?

Dandytf

jhyt89 wrote: »

Should I overpay if I am planning to sell my new place in 4 years time. Or should i save that money.

small overpayments are harmless.

Saving is not for everyone, which is why I find it simpler to overpay my mtg since 2013.

I wish I could save -maybe in future though i'll continue to overpay mtg -I see the 'benefits' from considerable reduced interest from yearly mtg statement -in effect I've 'saved thousands'

I'm since considering a 10yr fix next year from a 19yr mtg term.

What I've saved in interest I could never have 'saved in cash's my own.

Each to their own though, maybe if you are definitely moving in near term,then savings would e excellent for when it's moving in time, though maybe you'll then face temptation to spend all your saving on your new home.

Moneycoach

What LadyGnome said! :-)