Is it worth overpaying on existing mortgage if we plan to sell our property?

kookamunga

My husband and I own our flat with a Halifax mortgage, we plan to buy a new property as soon as we can afford it in 3 years. I have money I've saved up this year and I'm considering overpaying on our mortgage. We're past our fixed rate period so there's no ERC, I will remortgage before the end of the year so I need to decide what to do before then! I have a Santander 123 account, it was paying out 3% but went down to 1.5% this month, our current rate on our mortgage is standard variable 3.74%.

I am wondering if it's worth overpaying on the current mortgage if we plan to move in a few years anyway. There's no other place that I can find to put into savings that will return a better rate than what we're charged on our mortgage, so why not? Any thoughts from you guys why this might be a bad idea would be greatly appreciated!!

foxy-stoat

Depends how much your talking about and if your situation changes in the next few years that you need the cash.

I would keep it liquid and stick it in Premium Bonds and see what happens.

TheShape

How much money do you have saved?

You can save £5000 between you at 5% in two Nationwide FlexDirect accounts and an additional £500 per month each in the Flexclusive Regular Saver that comes with it. If your new mortgage is at % there are plenty of places your money can earn 3%+

AnotherJoe

As long as you have enough money fot an emergency fund and all the bits and bobs when buying a house, I'd overpay.