Overpaying vs saving

fergie_

The other factor to keep in mind is that putting money into the mortgage 'locks' it away, where as savings are a lot easier to access - especially if you see something for an emergency.

PixelPound

@littledino101 probably get lots of answers.

Personally I would say save as 4.26 is better than 1.57%. Indeed you could look at regular saver accounts as you are thinking of putting money away each month (quite a few at 5%+, or like FD at 7%).

Things to consider - what are you aiming to do when the fix ends? If its remortgage elsewhere then usually you make a lump sum payment then, and this would be far more than the overpayments + interest saved would be. If you are going to product switch then it might be a case of seeing what your provider allows.

If your mortgage allows say 10% overpayment - there is nothing to say you have to do this monthly and could put into a savings and pay a lump off annually - you are getting more from savings interest but also get the satisfaction of seeing mortgage go down.

What tax band are you and how much do you intend to save/overpay. Currently the Personal Savings Allowance is £1000 for basic rate payers and £500 for higher rate. Roughly that means upto about £20K at 5% for basic rate before you hit tax threshold, or starting at £0 if you put £3000pm into a savings you wouldn't hit the £1000 ceiling (assuming no savings elsewhere)