Mortgage overpayments: when to make them

DietIrnBru

As it currently stands I’ve a five year fixed rate due to expire in April 2025. It is at 2.14%. 39 year old single male with no dependents.

My mortgage stands at 68978 as of today with total overpayments of 3977 since inception in April 2020. 

When interest rates were low, I was overpaying the mortgage or investing in S&S ISA. Owing to the rise in interest rates and expected higher rate - i am aiming to have my mortgage lvt <60% by the time of renewal (home report value is around £100,000 at the time of purchase). 

I already save into the nationwide regular saver 5.25% at £50 pcm, the Yorkshire BS 5% at £300 pcm, RBS digital saver 6% at £150pcm and finally principality saver 5% at £125pcm. The regular savings will be used in part for the overpayment of the mortgage. I’ve also got fixed rate savers scattered with various maturity dates. My mortgage payments is around £350 - my bank reduced the payments when I made a big overpayment but I topped up the £30 they had lopped off to keep momentum. 

I live alone, there is a spare room with an option to get a lodger if circumstances dictated it. 

My main question is when is the prudent time to make the overpayments - at the end of the mortgage term when renewal is pending? Or using my yearly allowance which I think may be administratively easier but I appreciate its cash gone from easy reach.

Newbie_John

You may possibly get to 60% LTV without overpayments, your remaining mortgage will get close to £60k and the house price value may have gone up by now. So wait till March 2025 with overpayments, and consider fixing around November 2024 depending on which way rates are going then. Then you can also decide if it's worth saving or overpaying.