Would this work??

skintchick · 21 August 2006 at 10:29PM

Sorry if this has been asked before, but I haven't time to do a search

I am freelance and therefore don't want to commit cash each month to being MFW that I can't get back, just in case.

Is it feasible to save money in my ING account, and then when I remortgage, use whatever lump sum I have towards it to bring it down?

Is that a good plan? Will it make a reasonable difference?

If it help to know, I owe about £52,000 for another 22 years, am on 4.69 per cent fixed, pay £312.41 monthly and can probably save about £2,000 by the time the fix ends in July next year.

Joe_Bloggs · 21 August 2006 at 11:50PM

It is feasable as I'm sure you knew. I would rather not commit money to overpayments but have them on a voluntary basis. The capability to chip away at the main total will make a difference over time. The option of changing how much each month is liberating. The more you overpay the more you benefit given the overpayment limits on the mortgage.

You will probably pay tax on the interest you saved with Ing . You would not have paid tax on your mortgage overpayments. You can make more money with a certain National Savings minicash isa product.
J_B.

Gingham_Ribbon · 22 August 2006 at 9:14AM

We have various savings and shares etc that we have put into our fixed rate mortgage each time it was up for renewal to bring the mortgage down. it's worked well for us.

But we're on variable rate now and we can make the payments any time so it does make things more flexible. We are overpaying by about £100 per month as well but that is voluntary and we can alter our direct debit if need be.

tawnyowls · 22 August 2006 at 6:19PM

skintchick wrote:

I am freelance and therefore don't want to commit cash each month to being MFW that I can't get back, just in case.

Have you checked if you can? Some mortgages, even if they don't actually advertise themselves as being offset or current account mortgages, do allow you to put in money and then withdraw it if you need to. You should check with yours - if you can, that would obviously be the best thing to do, because of the tax advantage pointed out earlier. If that's not possible, perhaps you could split it - say save £500 and then put the rest into the mortgage, but knowing you have that £500 there just in case.

SAP_Saver · 23 August 2006 at 1:09PM

it is the 'norm' to be able to overpay 10% of the outstanding balance each year in overpayments... personally I would overpay with every spare penny I have but I do not have any CCs or any debts with high interest - these must be the priority! searcg forums for a spreadsheet called "offset or not/offsetornot" Loan Amortisation - this can do the calculations for you! savings vs overpaying

Would this work??

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