Should I overpay or save?

freesha

Not sure if this should be here or the general mortgages board??

 

Hi all, interested to know what you would do if you were me.

Mortgage is £53400 left, current deal is 1.29% (£335pm) fixed until October 2026. There will be 14 years left in October.

I could probably overpay between £100pm and £200pm. Would this make sense, rather than saving it? I have an ISA with Monzo (currently 2.75%) and a savings account with my BS (currently 1.1%).

If relevant: single income, work FT, early 40s, teenage child. Not looking to ever move.

Thanks for any thoughts

Angelica123

As your mortgage rate is low, it would be better to save the money in a savings account and pay it as a lump sum at remortgage.

Given easy access savings accounts have rates of approx 4% and regular savers rates up to 7.5%, you would most benefit of looking into getting one of those for your mortgage overpayments.

This is presuming you already have an adequate emergency fund. If you don't that should be your priority over mortgage overpayments.

Newbie_John

Small numbers here really. You'd be better opening First regular saver of 6-7% (or whatever it is now) and save there monthly for a year. In February next year use it all to overpay your mortgage. And repeat.

MFWannabe

very similar circumstances to us last year

Do you already have an emergency fund?
If not I would build one first

You can get much better savings rates than you currently have

Look for a 6 month saver that you can’t access; then pay that off the mortgage when it matures

If you fix ends in October then overpay when you the very low interest rate ends

freesha

Thank you all