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Should I start to overpay on mortgage?

CDB199
Posts: 67 Forumite


Have two mortgages, both recently started and am wondering if I should be overpaying on either or both?
I have a buy to let M with balance of roughly £150k. On repayment £733 where rental income is £1550 (minus £300 pcm expenses).
I have residential mortgage on main property balance £340k. On 24yr (5yr fixed) repayment £1400 pcm.
I have a buy to let M with balance of roughly £150k. On repayment £733 where rental income is £1550 (minus £300 pcm expenses).
I have residential mortgage on main property balance £340k. On 24yr (5yr fixed) repayment £1400 pcm.
I can afford to overpay. Pay into private pension 500pcm & this could also be reduced to overpay both, should it sound more sensible to pay off money borrowed first?
thoughts welcomed.
thoughts welcomed.
1
Comments
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Pension over mortgage is a tricky one and you will get different answers! I go for a balance as have fairly good pension provision and like the surety of seeing the mortgage balance go down.Questions that might help you decide- do you have a good LTV, how secure is your employment, what if the tenant stops paying, do you have any life changes on the horizon, do you want to work for the next 25 years. You don’t need to answer here but things to consider that will give an idea of your attitude to risk and the future to help you decide.MFW 2021 #76 £5,145
MFW 2022 #27 £5,300
MFW 2023 #27 £2,000
MFW 2024 #27 £6,055
MFW 2025 #27 £2,850/£5,0002 -
Also pension may be more tax efficientMFW 2021 #76 £5,145
MFW 2022 #27 £5,300
MFW 2023 #27 £2,000
MFW 2024 #27 £6,055
MFW 2025 #27 £2,850/£5,0002 -
Thanks - all fair points to consider.
I guess what you are saying (possibly) Is there is no hard mathematical answer? Just depends on circumstances & what one is working towards.1 -
Reducing pension payments was only a suggestion. I think I could continue payment into pension to take max tax benefits here.
it’s more a question of is overpaying on mortgage advisable today? When Loan is fixed long term on low rates. I’m keen to reduce loan & see it starting to be paid off asap - but if numbers don’t fit, this may not be best answer for me.
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What % do you pay into your pension at the moment? I started to overpay my mortgage recently as I want to try to be mortgage free before retirement age so hopefully I dont need to have so much pension each month.1
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I do try to increase payments by 1% every few years as I get older, my thought being if I increase it show and my the smallest amount I hopefully notice it less when it comes out of my salary each month. The tax benefits of paying into a pension seem to make this a good choice.1
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Confused63 said:I do try to increase payments by 1% every few years as I get older, my thought being if I increase it show and my the smallest amount I hopefully notice it less when it comes out of my salary each month. The tax benefits of paying into a pension seem to make this a good choice.
so feel like I am contributing nicely for l/t retirement. Just want to get mortgage free similarly1 -
We were planning to overpay our new mortgage but there are now savings accounts with higher rates than our mortgage so it makes more sense to save for the duration of our fix and then pay it off when we remortgage. The tricky bit is not spending it!1
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CDB199 said:Have two mortgages, both recently started and am wondering if I should be overpaying on either or both?
I have a buy to let M with balance of roughly £150k. On repayment £733 where rental income is £1550 (minus £300 pcm expenses).
I have residential mortgage on main property balance £340k. On 24yr (5yr fixed) repayment £1400 pcm.I can afford to overpay. Pay into private pension 500pcm & this could also be reduced to overpay both, should it sound more sensible to pay off money borrowed first?
thoughts welcomed.
So what's your income without the rental? How does that compare with your annual outgoings?
How long would you survive financially without the rental income or if there was a big bill on the property?
Do you have separate personal and business (landlord) emergency funds?
How big is your existing pension provision?
What age are you?
When are you hoping to retire?
Do the online pension calculator's reckon you are paying enough to your pension to meet your goals?
Are you due to get full state pension when you retire?
Are you planning to carry on being a landlord when you retire or do you expect to sell the property?
I am not a financial advisor - these questions should hopefully help you answer your own question. You could also post it on the pensions board.Achieve FIRE/Mortgage Neutrality in 2030
1) MFW Nov 21 £202K now £172.5K Equity 36.11%
2) £1.6K Net savings after CCs 14/8/25
3) Mortgage neutral by 06/30 (AVC £25.6K + Lump Sums DB £4.6K + (25% of SIPP 1.2K) = 31.4/£127.5K target 24.6% 1/9/25
(If took bigger lump sum = 53.3K or 41.8%)
4) FI Age 60 income target £17.1/30K 57% (if mortgage and debts repaid - need more otherwise)
(If bigger lump sum £15.8/30K 52.67%)
5) SIPP £4.8K updated 29/7/250
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