Inheritance and paying chunk off mortgage

Keep_pedalling

AircraftHandler said:

My wife only works part time and is on maternity leave, so her tax is non existent at the moment. 

If she not actually planning to go back to work after ML then put it all in her name, otherwise split it.

Bigphil1474

I think the OP meant that he can overpay by 10% each year - if he puts the money in a savings account, then next year he could only pay 10%, but he could pay 10% this year and 10% next year, so basically 20% reduction in the mortgage. Given next year he'd probably be on a much higher interest rate, it might save more in the long run to pay some off now and some next year. I don't know which is best although putting it in a 6% savings account does look the better option. Is that 10% limit only while you are on a fix?

AircraftHandler

Bigphil1474 said:

I think the OP meant that he can overpay by 10% each year - if he puts the money in a savings account, then next year he could only pay 10%, but he could pay 10% this year and 10% next year, so basically 20% reduction in the mortgage. Given next year he'd probably be on a much higher interest rate, it might save more in the long run to pay some off now and some next year. I don't know which is best although putting it in a 6% savings account does look the better option. Is that 10% limit only while you are on a fix?

Hi, Thats exactly what i meant. I can only make a 10% over payment each year.

Bluebell1000

At the end of the fixed rate, you can pay off an unlimited lump sum before moving onto a new mortgage product (unless you have some very odd T&C). 

Bigphil1474

Sounds like the best bet is to put as much in the savings as you can this year, and pay a big lump sum off at the end of your fix then (after checking your T&C's).