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How best to pay off mortgage?

MeenaM
Posts: 320 Forumite

Hi
Will be debt free except the mortgage in September and want to then start to attack the mortgage , currently stands at just over £100,000 with 14 years to run.
I am confused though how best to do this, is it better to put aside the savings in an account then pay off a lump sum or pay extra each month?
I am with Santander and know they allow over payments
we have managed to pay off about £25,000 in 22 months if we saved that we would in theory have enough to pay off the mortgage in about 8 years the over payment calculators i have gone on show that if we overpay i think santander is only 10 % per month then we will take 12 years to pay it !
Will be debt free except the mortgage in September and want to then start to attack the mortgage , currently stands at just over £100,000 with 14 years to run.
I am confused though how best to do this, is it better to put aside the savings in an account then pay off a lump sum or pay extra each month?
I am with Santander and know they allow over payments
we have managed to pay off about £25,000 in 22 months if we saved that we would in theory have enough to pay off the mortgage in about 8 years the over payment calculators i have gone on show that if we overpay i think santander is only 10 % per month then we will take 12 years to pay it !
paid off £27,527.47 debt free journey began Nov 2017 DEBT FREE 13.09.2019!! EF £3500/£5000
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Comments
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what I mean is , is it better to pay some off each month or save it in a savings account and then pay it all off in one lump sum?paid off £27,527.47 debt free journey began Nov 2017 DEBT FREE 13.09.2019!! EF £3500/£50000
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What's the interest rate and what's the maximum you can overpay without penalty?0
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Hi it's 2.2 % and the max is 10% of the balance per yearpaid off £27,527.47 debt free journey began Nov 2017 DEBT FREE 13.09.2019!! EF £3500/£50000
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You should be able to get better than 2.2% on some savings so that money shouldn't be used to overpay the mortgage. Once you've maxed those, overpayments will be worth it.
It's a pretty low interest rate though so it may be worth putting your money elsewhere. Do you both have pensions?0 -
You should be able to get better than 2.2% on some savings so that money shouldn't be used to overpay the mortgage. Once you've maxed those, overpayments will be worth it.
It's a pretty low interest rate though so it may be worth putting your money elsewhere. Do you both have pensions?
HI am sorry I made a mistake my interest rate is 2.19% , thank you for your reply and I will check if can get more than that in savings first I also today spoke to my lender about this and confirmed can pay 10% of balance in any one year as presently on a fixed rate until 2022, it also doesnt seem to make much difference if you pay extra each month or make a one off lump sum so it might make sense to save and get a bit of interest payment each year then make a lump sum, we want to reduce the mortgage term and the lender has now made a note that any payments we make will be used to do that.
:jpaid off £27,527.47 debt free journey began Nov 2017 DEBT FREE 13.09.2019!! EF £3500/£50000 -
it also doesnt seem to make much difference if you pay extra each month or make a one off lump sum so it might make sense to save and get a bit of interest payment each year then make a lump sum
It does make a difference - paying it off sooner means you reduce your interest sooner but it's always worth considering whether you can get more in savings first (and consider other debts and pensions too). If you can't get more in savings and don't want to put it in a pension then you may as well overpay monthly. There's no point holding on to it to pay a lump sum every few months.0
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