MSE mortgage overpayment calculator accuracy?

jolester

I am trying to calculate the best option for overpaying vs savings.

Having used the MSE calculator, it tells me that I am better off saving, however, am I correct in thinking that this wont be accurate, as it it asking me for the following info

Mortgage balance
Term
Percentage

My mortgage term is 28 years, but the rate is only relevant for the next three years until my fix ends.  We all know that I'm pretty unlikely to secure another mortgage at 1.92% in 3 years time so wont this skew the true figure and it really needs to have the option of two rates for two different time periods? 

simon_or

It only tells you what will save you most money right now.

And with a sub 2% mortgage for the next 3 years, with fixed savings rates much higher, it may save you money to pay into savings rather than the mortgage. When you get to the end of your 3 year period and you know what the next rate is, you can decide whether to reduce the size of your mortgage using the savings or not.

jolester

Thanks Simon.  I did put up a post yesterday with further details asking for any advice, but had no reply.  Would you possibly mind taking a look and seeing if you have any thoughts on what might be best as I have a further advance as well as mortgage? 

Coffeekup

As Simon says it's for rates you are currently on. Pay around with it a bit and see what will happen if you are paying rates of 4/5/6 %.
But if you are looking at over paying quite a chunk in that time look at the LTV rates and try and fit into the next bracket as you get better deals.

jolester

Thanks Coffeekup. What are the specific LTV brackets please?

Coffeekup

jolester said:

Thanks Coffeekup. What are the specific LTV brackets please?

90/80/75/60 and 50%. Each of these brackets tend to have a better deals, 50% being the best deals offered. 
Be careful you don't pay too much off, and go over you're overpayment limit... Which tends to be 10%. So check your mortgage information.

jolester

Thanks CoffeeKup, we only pay £500 per month so we're within our 10%, and 50% LTV would be the next bracket we'd have to aim for, 

There seems to be very little difference (though some, I calculate approx £300 per year ) between overpaying £500 for the next 3 years, or putting in a 5.1% interest savings account each month.