Should we make overpayments?

Abbafan1972

Hi there,

Our current Mortgage deal comes to an end soon and we have fixed it again until 30.01.2026, rather than going on a variable rate.

We only have approx £48K left on this mortgage and want to get it finished really by around the end of March 2027.  

I know that we can make overpayments.  Our interest per month is about £150 - is it worth making overpayments by about £150 a month - or put the money aside and make a lump sum overpayment at a later date?

Thanks in advance. 

Veteransaver

Check the terms of your mortgage, normally with fixed rate mortgages you can only overpay.10% of the loan in a year.
Of course you could pay off a chunk though in between your current one ending and the new one starting, ie remortgage at a lower loan value, without penalty.
If your current mortgage is less than what you could earn in an instant access savings account it may be worth paying some off the current one just before you renew, though the potential savings involved won't be huge.

Newbie_John

As mentioned above really, check your new mortgage rate, check your overpayment limits (calendar year, mortgage year), best savings account rates and how good are you with money - will you be tempted to touch what you saved?
Also do you have any other debts? What's your/your partner (if joint mortgage) tax rate?

Based on the above the answer is either save or overpay, or mix of both.