Overpayments - monthly or annually

Polly_Pod

Can anyone advise which would make the most effect... overpaying monthly or putting it into a savings account then pay off annually.

Any suggestions would be most appreciated

thanks

MickHG

Hi, PollyPod
While your Saving you money yearly at a relatively low interest rate, your Mortgage Interest is growing at a relatively Higher rate.
Your Mortgage rate and Savings rate would have to be the same to make no difference
So I suspect the sooner you pay it off the better.
That's assuming you don’t want the money for anything more important.
Regards Mick

dimbo61

hi polly not that simple
if your mortgage rate is say 4.5% and you can save into an ISA ( cash ) at 6% then you are better off saving into isa,s and building up your savings.
at the end of your cheap rate the mortgage company want 8% for your next
mortgage offer and ISA,s are only paying 6% then you would be better off using your savings to clear a big chunk off the DEBT.
try to save six months worth of income into ISA,s as emergency fund

Polly_Pod

Hi
Thanks for this advise..... currently our mortgage is about 5.5% (variable) - so hopefully in current trend will either stay the same or get a bit lower) and our savings are 6.4% (fixed til 2011). We've also kept the payments the same after the hike interests rates so that's a bit of a help too.