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Should I over-pay on an interest-only mortgage?
bigdog69
Posts: 18 Forumite
Hi,
I have one-year left of the fixed term on an interest only mortgage (£245k @ 4.55%) and intend to change to a repayment mortgage at the end of the term. I am able to overpay £250 per month.
How do I work out whether it is better to overpay some of the capital now, rather than putting £250 per month into a savings account at around 6.5%?
Thanks
Al
I have one-year left of the fixed term on an interest only mortgage (£245k @ 4.55%) and intend to change to a repayment mortgage at the end of the term. I am able to overpay £250 per month.
How do I work out whether it is better to overpay some of the capital now, rather than putting £250 per month into a savings account at around 6.5%?
Thanks
Al
0
Comments
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Hi, sorry I can't answer this but I'm hoping someone will. By me adding this response it'll go back to the top again & hopefully will be spotted by someone in the knowWhere there's a will.............I want to be in it!
Nick0 -
If the net interest you receive on your savings is greater than the interest being charged on your mortgage then yes it will be better off in savings.I am a Mortgage AdviserYou should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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HI it really depends on what rate you will be repaying on your repayment mortgage next year, my guess would be to put the money in a saving account and use it for a deposit on your next mortgage, it could help you get a better rate. the lower the loan to value rate the better. hope this helps.I am a Mortgage Adviser
You should note that this site doesn't check my status as a mortgage adviser, So you need to take my word for it. This signature is here as i follow MSE's mortgage advisers code of conduct. Any posts on here are for information and discussion purpose only and shouldn't be seen as financial advice.0
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