Save or pay off mortgage?

bmthmark

Hi

I currently have a mortgage of £179k (fixed interest rate 1.9% ends in May) and my house is worth approx £400k.

My mortgage payments are £1000 a month and I overpay £400 every month.
I am also saving £500 a month in a seperate account.

I have been thinking whether I should overpay more each month? or just keep saving the extra £500 and eventually pay a lump sum.

I do like having the savings as its like a safety net if anything happens to my job etc. What would other people recommend?

My mortgage is up for renewal soon, so I am hoping to get a better fixed rate.

Thanks

benten69

Unless you can save and get more interest than what you are paying on the mortgage, I would just continue to over pay. Definitely save enough for a safety net, it's always important to have some liquid cash, but if you have a good safety net and are wondering if you should just keep adding to it or pay off the mortgage, the mortgage will win it for me.

Nurse2047

Have you watched https://youtu.be/r9k5ebqbSGM

I like this advice of doing both and compounded interest able to pay off mortgage down the line 

getmore4less

Should be looking for your new deal now.

Which lender?

FtbDreaming

If your fixed rate ends in May would it be worth looking at an offset mortgage? You’re below 50% ltv aren't you so ot should be an option. That way you’d still have your savings available for emergencies if needed but also building up the mortgage neutral fund! I’m no expert though but that’s what I would do x

bmthmark

Thanks for the responses all.
My mortgage is with HSBC. Sorry I got my dates wrong, August is when it ends. HSBC said I can get a new one with them earliest is May.
I quite like the low 5 year fixed rate at 1.39% but I can't get this until May.
MFW2026 I will watch that video - thanks
FtbDreaming I will need to do some reading up as I don't really know what an offest mortgage is - thanks

Chaarli

Hi there, I would consider your retirement goals as well. Increasing your pension contributions is tax efficient - if you already have a sufficient emergency fund.