Overpay to mortgage or put in savings account

feedthebear

Just taken out a new 2 year FR mortgage 5.49% which we can make overpayments of 500 per month, before Early remption charges kick in. Came into some extra cash £20k, and wondered whether best to put all into savings account for 2 years, or start paying back 500 a month just now.

Any advice would be appreciatted.

jonesMUFCforever

As long as you have an useful pot of savings as a rainy day emergency fund then I would go for the repayment option.
There are not many savings accounts out there paying 5.49% NET

Make sure you take advantage of your Mini cash ISA allowance - this is the only straightforward way to beat that rate IMO.

dpesky

pay the 500 per month off the mortgage, keep the balance in a high interest savings account and re look at the finances and savings when the mortgage is due for review.

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