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Advise for a newbie
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gracie83
Posts: 301 Forumite


I have a mortgage of £120600 with HSBC Homestart on a 10 year fixed rate over 30 years. The repayments are £550 for the first three years going up to £720 for the rest of the fixed rate period. I am only allowed very limited overpayments on these payments - £110 over payment for the first three years then £142 overpayment for the remainder. I currently have between £500 and £600 a month going spare for savings.
I have a few queries:
1. Should I overpay what I am allowed and keep the rest in a saving account until the end of the 10 years and pay over what I have saved or should i just save everything and not do the overpayments.
2. If you start over payments are you commited to them or can you pay on a monthly basis. Just worried about 'rainy days'.
Any advise would be greatly appreciated as I want to reduce the amount of time I will need to repay for after the 10 years are up. I know that alot could change over the years (just graduated and hunting for the elusive 'well paying graduate jobs' that graduates enjoy!) but I want to try to start off well.
I have a few queries:
1. Should I overpay what I am allowed and keep the rest in a saving account until the end of the 10 years and pay over what I have saved or should i just save everything and not do the overpayments.
2. If you start over payments are you commited to them or can you pay on a monthly basis. Just worried about 'rainy days'.
Any advise would be greatly appreciated as I want to reduce the amount of time I will need to repay for after the 10 years are up. I know that alot could change over the years (just graduated and hunting for the elusive 'well paying graduate jobs' that graduates enjoy!) but I want to try to start off well.
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Comments
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We're on a fixed rate for 10 yrs too, and we're doing the same as you're thinking. When the fixed rate is up, I'm hoping we'll have enought to kiss the woolwich goodbye!
Even though we're tied in we were able to reduce the term of the mortgage thus upping the monthly payment - perhaps your provider offers the same? That way you could overpay as well as having a higher regular amount to pay monthly. That would use more of your 500 - 600 per month towards the mortgage.
Best of luck with what ever you decide. Happy hunting on the job front too.
xx0 -
I would say that you could probably earn more on your savings than you can by overpaying the mortgage.
But (and there always is one!) any savings you have will be taken into consideration if you should ever need benefits.
You will be able to search for a new lender after 10 years though and find the best deal for you then. I would reckon that you should overpay to your limit and then save the rest.
You could also ask your lender if it's possible to change the term and reduce it by one year every so often. The thing to remember is that the earlier you start making overpayments the more effect it will have.
Good luck with this!Debt: 16/04/2007:TOTAL DEBT [strike]£92727.75[/strike] £49395.47:eek: :eek: :eek: £43332.28 repaid 100.77% of £43000 target.MFiT T2: Debt [STRIKE]£52856.59[/STRIKE] £6316.14 £46540.45 repaid 101.17% of £46000 target.2013 Target: completely clear my [STRIKE]£6316.14[/STRIKE] £0 mortgage debt. £6316.14 100% repaid.0
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