Timing of using savings to bring down mortgage before remortgaging

Newbie_John

First of all, you don't know what saving rates/mortgage rates will be in 2025 - if your mortgage is 4% and savings 4% would you still overpay?
How big is the difference? Is your yearly overpayment limit at let's say £20k and you saved £80k?

Overpayments limits are always really messy, if your deal expires in Feb 2025, I think with Barclays you can pay max at the end of 2024, max in Feb 2025.. and then max again when you switch to a new deal - as it will be your new max for 2025.. - call your bank and ask :-)

If the ratio is larger, then you'll be looking to overpay during short period between old and new fix - again call bank and ask them what's the best way to do it - I heard some may allow at the end of old fix, some will let you set a start date week later giving you a short window to overpay.. some banks have more generous limits 20%, some have no limits First Direct etc.

I guess not much to do in 2024, keep saving

moneysaver1978

We3 said:

moneysaver1978 said:

Why not pay to the max overpayment allowance now and when the fixed term ends, add the rest as part of the mortgage?

Simply because the money is currently getting much higher interest (over 5%) than our mortgage which is 1.3%. 

I meant before you remortgage, e.g, last few months before the fixed term ends but I guess it depends on how much (in amount) interest generating in a savings account and and how much interest you are paying for your mortgage.

FataVerde

We3 said:

We fixed for 5 years in 2020 at 1.3%. Since then we've been saving because our savings rates have exceeded the mortgage rate. We now have a sum of money we'd like to use when we remortgage to bring down the amount. My question is about the timing of doing this: would we need to go on to the SVR first, use the lump sum, then remortgage? Or could we essentially do it as part of the remortgaging process?

I am in the exact same position, exact same interest rate for 5 years. I would also like to add a lump sum when I remortgage. Have you figured out when exactly you can do this in the remortgage process?

penners324

Send them savings amount to the Conveyancer doing the remortgage 

kingstreet

Are you remortgaging; or are you taking a customer retention product from your existing lender?