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Do you have both savings and a mortgage?

(33 Posts)
Virgil Sun 06-Jan-13 22:17:44

Given the low interest rates is it silly to have savings when you have mortgage debt? Do you prioritise paying off the mortgage or keep a level of savings too?

Indith Tue 08-Jan-13 20:34:53

You need some savings too, you can't get money back from your mortgage easily if things go a bit wrong and you need to replace the boiler/fix the roof/buy a new car.

We have a small amount of savings, they still need to be built up a bit more before we can think of starting to over pay the mortgage.

If you have a comfortable savings buffer then overpaying is usually the best option though you'd have to ensure you wouldn't get too stung by overpayment penalties.

Virgil Tue 08-Jan-13 21:21:29

Mercibucket your set up would seem to be the best solution, 6 months money offsetting against an interest only mortgage - you have all bases covered!

Will investigate First direct. Our mortgage is with HSBC and they're the same group aren't they.

myron Wed 09-Jan-13 12:23:17

We've had an offset mortgage for 7yrs now. We did utilise most of our savings pot recently on house renovations so am trying to slowly build it back up. We love the flexibility of it and we have used it fully during the house build - i.e borrowed more without further fees. We still have pensions, ISAs/stock but the offset savings pot has totally negated our need for an instant access savings account.

Pythonesque Thu 10-Jan-13 05:43:58

We have substantial savings in shares ISAs - mostly built up before we moved to our current house in fact as I've been studying rather than working. The return on them while variable has been better than our mortgage rates. Accessibility adequate with a certain amount of planning. School fees currently part coming out of them ... and the new boiler when ours failed boxing day ... I'd previously thought of those savings more in terms of "flexible pension alternative".

MummytoKatie Thu 10-Jan-13 07:03:28

Our mortgage rate is low so we earn more on our ISAs than we pay on our mortgage. So we max out the ISAs first.

We also keep quite a lot in easy access savings (probably six month living expenses). We would reduce this but we are thinking about a new car and a new bathroom so if we ever get around to deciding which one (debate been going on for quite a while now) we'll need the money.

We also automatically overpay each month on our mortgage to the amount it was when interest rates were at their highest as we never put our payments down so are used to them being that high.

Anything less after all this (not much now we have dd and I only work part time) is overpaid on the mortgage.

wonkylegs Thu 10-Jan-13 07:10:16

Our mortgage is tiny and the rate so low that it's not worth paying it off - it's better to max out our ISAs instead.
I thought that was the case & checked with our IFA who thought I was crazy for mentioning it.
It's really personal situation dependent.

yellowsubmarine53 Thu 10-Jan-13 07:19:17

We have enough saved for 12 months if either of us lost our job/became too ill to work. when interest rates became so low, we started overpaying our mortgage by a considerable amount. We do this on a month by month basis, so could stop tomorrow if our circumstances change.

We are hoping to move in the next few years, though if that makes a difference.

zlist Thu 10-Jan-13 20:22:40

DH and I have both been quite driven to pay off our mortgage early but have, what seems like suddenly, found ourselves in the position of having more savings/investments than the outstanding mortgage. It just doesn't make any sense for us to pay off the mortgage at the moment though - even though I really want to!

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