Should I Reduce or Save?

piggywinkle_2

Hi,

I have come into a sum of money. At the moment would I be better to pay it off my mortgage or put it in a savings account?

Thanks

Mummy_Cookie

piggywinkle wrote: »

Hi,

I have come into a sum of money. At the moment would I be better to pay it off my mortgage or put it in a savings account?

Thanks

I would have thought that before you can make that decision you would need to compare the interest rate you are paying your mortgage against the potential interest rate on a savings account.

You would also need to look at the flexibility on your mortgage to make any such overpayment - would you incur any penalities etc. Is there any safety net if you pay it off against your mortgage in case you were to lose your job etc? For example, on our mortgage if we have made overpayments we can later request not to pay for the equivalent period that those overpayments would have cover if we hit hard times.

Just a couple of things that would be worth asking yourself before you decide.

I am by no means an expert in this area but am sure someone else who knows more about this than me will be along to help you soon. Good luck in whatever you decide to do.