Mortgage Free Plan

kparky1

So, I checked with the mortgage company how much it would cost to repay my mortgage in 5 years. I'd have to pay an exercise £657 a month.

Our mortgage rate is 2.54%. However - If I put that amount in to my Santander savings account I'd earn 3% interest. So surely I'd be better off putting my money in to my Santander account?

My mortgage is £126000 over 11 years @ 2.54%

Any advice would be much appreciated - overpayment or savings?

Lrimas

It depends on how good you are at not spending money that is assigned to something else. The advantage of paying into your mortgage is that you can't use it to buy cookies instead

If you are disciplined savings/investments make more sense. The Santander account is going down to 1.5% in November so won't be a good fit, but regular savings accounts could be as they currently still go up to 6% (although they have a short lifespan).

kparky1

Oh no. I hadn't heard that Santander were dropping their rates.

I'm pretty good at saving - once it's in there it stays in there. But at 1.5% that's less than the mortgsge rate so would make sense to overpay the mortgage.