Mortgage overpayments: when to make them
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.
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