Worth paying overpayment charges?

downhillfast

Guerillatoker wrote: »

Hate to hijack a thread but reading this gave me thought to my situation.

If my rate was 4.85%, would it still be worth going with a 5% regular saver rather than overpayments?

I understand that on the raw maths that it will save me 0.15%, but is there any practical or technical considerations that would make that 0.15% not worth it?

A rate of 4.85% would indicate that you probably have a high LTV? If so then I would overpay the mortgage to pay the capital down with a view to securing a much better rate when remortgaging.

We took out a 95% mortgage at a rate of 3.99% as we had few options at the time. However we have been overpaying when possible and anticipate being at 80-85% LTV by the time we come to remortgage at the begining of next year... which Im hoping will get us a rate beginning with a 1 or a 2!

Guerillatoker

downhillfast wrote: »

A rate of 4.85% would indicate that you probably have a high LTV? If so then I would overpay the mortgage to pay the capital down with a view to securing a much better rate when remortgaging.

We took out a 95% mortgage at a rate of 3.99% as we had few options at the time. However we have been overpaying when possible and anticipate being at 80-85% LTV by the time we come to remortgage at the begining of next year... which Im hoping will get us a rate beginning with a 1 or a 2!

Poor credit unfortunately, 85% LTV. Hopefully after my 5yr fixed I should look much more attractive, as all negatives should be long gone by then.

Best of luck securing something better when the time comes!

JimmyTheWig

downhillfast wrote: »

A rate of 4.85% would indicate that you probably have a high LTV? If so then I would overpay the mortgage to pay the capital down with a view to securing a much better rate when remortgaging.

I agree, but there's no point in not taking the savings account interest in the meantime.
Get the best return you can in the here and now, with a view to paying the money off the mortgage when the time is right.