Lump sum or overpay?

debs_ll82 Forumite Posts: 1 Newbie
I am fortunate enough to have 2 more years on a low interest rate. I have some savings and curious if I should over pay monthly say £200 a month for the next 2 years  or pay off a lump sum (the max allowed) ?


  • IftiBashir
    IftiBashir Forumite Posts: 486
    Ninth Anniversary 100 Posts Name Dropper Combo Breaker
    I always paid lump sums into my mortgage when my fixed rate came to and end every 2 years as the way I saw it, I wanted to decrease the interest as much as possible, in one hit, and hence pay back less overall. Over the entire term you will pay back less when putting down lump sums then you would with overpaying. Of course, either is beneficial, and if putting down lump sums ensure you have enough in savings for emergencies!

  • simon_or
    simon_or Forumite Posts: 890
    500 Posts First Anniversary Name Dropper
    If it's a low interest mortgage then plonk it in a high interest savings account, you're losing money by overpaying a low interest mortgage in the current savings rate environment.

    Even easy access ones are paying over 4% now and regular savers can pay much more.
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