Does Anyone Know What Is Best, I Need Help
chatter-box-charlie
Posts: 109 Forumite
Does anyonw know if it is best to make overpayments per month and reduce the term OR pay a lump sum at the end of each year?
will it make any difference?
will it make any difference?
I am a Travel Agent
I work for Thomas Cook Group of Companies. My companies ATOL/ABTA numbers are J9500. You should note that this site doesn't check my status as a Travel Agent, so you need to take my word for it but Atol numbers can be checked on the Civil Aviation Authority website. This signature is here as I follow MSE's Travel Agent Code of Conduct.
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Comments
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It all depends on the relative interest rates. If you can save the money at a higher rate (after tax) than the mortgage then you're best off paying the lump sum. If you're saving rate is less than the mortgage then you're best off overpaying the mortgage.Happy chappy0
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My theory
- Save for a year every month and make lump sum at the beginning of the year.
Practice:
Well lump sum at the beginning of the year was ~40% of the overall sum allowed so I will be trying for every 2 month lump sum payments while still saving for next year.MFW on your mark0 -
It also depends on how your mortgage works. It used to be the case (but this may have changed?) that some mortgage issuers would allow overpayments to accumulate , gaining the interest for themselves, and only apply them to the mortgage annually. I think this may have been forcibly stopped, but would check with your mortgage issuer. I do know that some banks calculate a daily basis, and some a monthly, so it might well be important when you make your payments.I was a board guide here for many years, but have now resigned. Amicably, but I think it reflects very poorly on MSE that I have not even received an acknowledgement of my resignation! Poor show, MSE.
This signature was changed on 6.4.22. This is an experiment to see if anyone from MSE picks up on this comment.0 -
Daily basis is best, in case you weren't sure - it means that they recalculate how much you owe each day, so it'll change every time you make a payment, rather than only being updated after you've made a year's worth of payments.0
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thanks for the advice. When I phoned them all they said was that they would reduce the term for me but any other advice she was unable to give me and I had to speak to a financial mortgage advisor...I am a Travel Agent
I work for Thomas Cook Group of Companies. My companies ATOL/ABTA numbers are J9500. You should note that this site doesn't check my status as a Travel Agent, so you need to take my word for it but Atol numbers can be checked on the Civil Aviation Authority website. This signature is here as I follow MSE's Travel Agent Code of Conduct.0 -
As well as the mortgage t&cs as noted above, it does depend on your circumstances
If you have a rainy day fund, the other consideration is how strong you are
If you can save and not touch it, then fine, but personally I prefer to max out on paying it monthly and then force myself to live on the rest0
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