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How best to pay off mortgage?

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 !
paid off £27,527.47 debt free journey began Nov 2017 DEBT FREE 13.09.2019!! EF £3500/£5000

Comments

  • MeenaM
    MeenaM Posts: 320 Forumite
    Debt-free and Proud!
    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/£5000
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    What's the interest rate and what's the maximum you can overpay without penalty?
  • MeenaM
    MeenaM Posts: 320 Forumite
    Debt-free and Proud!
    Hi it's 2.2 % and the max is 10% of the balance per year
    paid off £27,527.47 debt free journey began Nov 2017 DEBT FREE 13.09.2019!! EF £3500/£5000
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    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?
  • MeenaM
    MeenaM Posts: 320 Forumite
    Debt-free and Proud!
    ViolaLass wrote: »
    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.

    :j
    paid off £27,527.47 debt free journey began Nov 2017 DEBT FREE 13.09.2019!! EF £3500/£5000
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    MeenaM wrote: »
    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.
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