pay lump sum off mortgage

adamcarvell

i have a 57k mortgage with Santander fixed at 3.39% till April 2019 . i have 10k to pay a lump sum off my mortgage in two installments 5.5k now then 4.5k in January as can only overpay 10 % . am i doing the right thing or should i put it into a savings account ?.

getmore4less

If you can't find savings at a better rate and are happy with your emergency saving do the 10%, check the amount carefully and what happens to your regular payment.

What's you ERC have you checked for a ditch the fix.

TBagpuss

Can you find a savings account paying more than 3.39%? If you can, it makes sense to put the money there . If not, then paying down the mortgage may be a good idea.

However, depending on your other savings and investments, you might also want to consider putting it (or some of it) into a pension or S&S ISA where there is a good chanvc that your long term returns will be better.

adamcarvell

e r c is about 5 %

makemesumdosh

My ERC was 5% but dropped by 1% every year. Ends next summer so only 1% now. Check yours only may only be 2-3% now. if you overpaid 10% now and again in Jan you could wait until April then only have a 1% fee to pay.
Have a good look at your agreement

adamcarvell

its fixed at 5% till the end . I'm thinking lump sum payed off saves approx 4k in interest and knocks 2.5 years off as well.

inland_andalucia

If you do decide to keep your savings separate, make sure they are earning a decent return.

AnotherJoe

Are you a high rate tax payer ? If so pension is likely to be substantially better option. Otherwise pay it off (subject to the above provisos about other savings you have, don't denude emergency savings).

adamcarvell

hi tax payer no i work for the nhs band 2