Early repayment or Saving

FTBDoom

So we have got a mortgage at rate 1.4% which is fixed for a further 4 years, and we still have 29 years left on our mortgage term
Currently interested calculated around £2000 a year
Initially we were going to make as much early repayment as possible, however now given the saving interest is more than double of our mortgage rate.   
Is saving the way to go for us? or better than bring down the outstanding amount?

willowparrett

Technically yes, you'd be better off in the long term paying into higher interest savings and accruing more interest there than you'd save by over paying your lower interest mortgage.  Emotionally, if you want to see your mortgage balance decreasing, then you'd still be saving interest by over paying (up to any limit imposed by your provider before they start charging fees), just not as much.  Have a play with a detailed mortage calculator (eg https://www.themoneycalculator.com/mortgages/calculators/mortgage-overpayment-calculator/#!/dealfinder/mortgages/) and compound savings calculator to see what the difference would be to help you make your decision. 

I'm in a similar position, fixed until 2027, and have decided to dedicate a zopa savings pot as an 'over payment' pot.  Anything that I would normally have made as a mortgage over payment is going in there, and I will pay it into the mortgage as a lump sum when my fix ends and I remortgage in 2027.  In my head, I deduct the balance of the zopa pot from my mortgage balance to see where I really am. 

 

L9XSS

As above, this is the best way to go.