Lump sum before or after 20 July 2017 at 1:48PM in Mortgage-Free Wannabe 1 reply 309 views

mundicman

Hi all, I have a comparatively small mortgage that is due for remortgaging in September. At present I've only got 8 years left. I have a couple of thousand that i plan to put down to knock off the capital( fees accounted for) However.......would it make any difference if i were to take it off at initiation of remortgaging or after??? I plan to pay over the recommended amount anyway to help shorten the term even sooner but don't want to be committed to the higher payment in case something crops up and cant afford it in the future.... SO,......Example £30,000 mortgage and pay off 4k after and also pay off £50 month extra ...or 26k mortgage and pay back same amount as previous each month??

wishingthemortgaheaway

Not entirely sure I understand your situation, but I suspect it all depends on any early repayment charges or limits on overpayments.
And if it would affect the loan to value percentage.

My gut reaction is make your mortgage as small as you can as soon as you can so you pay less interest over the remaining time.

So, if you've got money sitting somewhere that is intended to reduce your outstanding mortgage, pay it over as soon as you can - unless by some miracle your interest rate on the Mortgage is lower than what you are getting on the savings.