Mortgage over payments

Times_Are_Hard

I have left 14yrs 10 months on a five year fixed 16yr mortgage. Currently paying £825 per month at 1.13%, until the term ends.

I'm wondering how much better off I would be making a 10% lump sum over payment each year, until the fixed term ends (around £40k total), as opposed to when the fixed term ends, paying of say a £40k lump sum, then a new rate mortgage interest rate.

Bank won't help me with the workings out.

Thanks.

Strummer22

You did well to get a very low fixed rate.

By far your best option is to save the £40k (or as much as you can) in ISAs and/or instant access accounts paying much more than 1.13% interest and then chucking that lump sum in when you remortgage.

Sncjw

You can work it out usually bank has a overpayment calculator and also martin lewis does. 

IdrisJazz

Strummer22 said:

You did well to get a very low fixed rate.

By far your best option is to save the £40k (or as much as you can) in ISAs and/or instant access accounts paying much more than 1.13% interest and then chucking that lump sum in when you remortgage.

This is correct.

If there is no chance of you being able to pay off the whole amount before the end of the fix, invest your spare cash at a higher rate in a no-risk savings product, and you will be better off.

It's nice to see the debt reducing, but your savings can increase at a faster rate in your circumstances.