Do you over pay your mortgage ?

[Lardlizard]

We have Done at times but I honestly somethings think should we be less sensible

Due to divorce I am mortgaged until I am 67, so trying to pay off as much as I can to reduce the term. When I remortgaged last year it became £50 a month less, but I still pay the old amount.

I also put in a work bonus that I get once a year. I probably only manage to pay off an extra £1K a year, but every little helps. I save £20 a week towards special holidays and long term things, so if there is ever any spare in there, I will use that and pay a lump sum.

I took out my first mortgage 20 years ago, it is so galling to think that I could have been mortgage free in 5 years if circumstances hadn't changed :(

No. Our interest rate is very low so it makes sense not to. Will be paid off this year anyway.

We killed our 25 year mortgage in 12 years by putting all our pay bumps into the mortgage payments.

In the early years it's the best possible investment - your first few years of payments are almost all interest, barely bringing down the principle at all. If you want to minimise your overall payment on the house, throw as much into it as early as you can.

If you have other priorities (eg food and clothes for kids) then obviously spend money on them first!

Yes we pay 10% every year and not much left now so it's made a difference to us .

We have been for a while but I'm being made redundant so stopped the overpayment for now. If I get a new job quickly we will start again, we were overpaying by £250 a month.

About to purchase first home soon - the repayments on Mortgage should be about 300£ less a month than what we pay on rent - so would hope to overpay by at least that much each month as we are used to paying out that much!

We have also been saving for the deposit while renting so was hoping that we could keep saving that same amount each month too and trying to put it off the mortgage - but it would be nice to know that we could have a break from the over-payments every now & then and use that money for a treat !!

I always thought it would make good sense to overpay your mortgage as much as possible when interest rates are low?

That way If interest rates go up and you're having to pay more on the remaining capital the capital is lower. With interest rates are higher you have to pay more interest anyway so you have less money to overpay with, if any. So therefore it makes sense to overpay as much as possible while the interest rates are low.

Yes, by the maximum amount we can without penalty. There have been times that we haven’t been able to. It just depends on what else is going on.

No - our financial advisor recommended that with interest rates so low we were better off paying the minimum amount on our mortgage and putting anything else into savings. Would try to overpay if interest rate went up - that would tip the balance.

Yes as it worries me! I'm fascinated by the mortgage overpayment calculator on the money savings expert site. It shows you how much interest your overpayments will save you and how much they will reduce your term

Yes. Took ten years off our mortgage.

clitterati

That's always been my thinking too. I'd rather pay it off while the rates are low so I'm paying off as much as I can of the balance before they start to rise. Then when they rise put my money into savings and let it grow. I can pay off 10% of my balance a year so it always made sense in my head to pay it off earlier because I can then pay more off without penalty.

Nope. Mortgage interest is cheap, so the extra goes into savings (and frankly that's more useful for any unforeseen circumstances)

We do, however, reduce the term every time we remortgage. So there's that.

yes, (mortgage) interests are cheap - that's why you overpay as saving get's you less money.
reduced mortgage term or mortgage rate once interest rates rise will save you shitloads.

If your savings gets you a better positive rate than your mortgage gets you a negative rate, that's not the whole story. You need to net off the actual costs of mortgage over the term against the actual growth on savings. I bet you'll find paying into the mortgage is better value than savings accounts.

Get yourself a mortgage that allows you to overpay and draw back from the overpay pool - I had one of those with Halifax before I killed it in under half the time it should have taken.

Yes at the moment just by £25 to round the payment up to the nearest £100. Previously when my rate dropped I kept paying the same monthly payment as it wasn't money I was already spending. As these were small payments they weren't redeemed against the balance but just say there in "pre payment". When I went on mat leave there was enough "pre payment"
to cover six months mortgage payments while I wasn't getting paid a full wage

We have never been in a position to overpay and now we can finally afford to we can’t overpay because we are in the final few years and paying off early would result in early termination of our fixed rate deal and cost us several thousand pounds. But hey ho, only 4 more years until I will be mortgage free.

I do a mixture. Have a v decent employers pension contribution through work so feel like that is taken care of. So spare cash is a mixture of mortgage over payments, long term savings, a small amount of savings for the children, and enjoying life.

I don't think anyone should live in misery while overpaying for a future that isn't guaranteed (we don't all get to live to a ripe old age). But even little bits to chip away add up. Agree the mortgage overpayment calculators are great motivators.

Yes by £500 a month. We want it paid off before we’re 50.

I bet you'll find paying into the mortgage is better value than savings accounts.

Prompted by your post, I just double checked.

The savings are will make more than four times the amount the mortgage will cost until the end of its term.

Excuse the "are will" gibberish.

Definitely, every time we could we did. Ended up paying it off 5 years early. Now the money we would be paying goes on holidays and a new car. To me it's a no brainer
not least because we know that nothing can take our house off us.

Our last term was 15 years and we cleared it in under 13 - we were overpaying by £2k per month until it had gone for the last year, but dh was retiring at 58, so we wanted it gone. It was the last debt standing, so we kicked it hard.

Yes mortgage £705 and we pay £1105. We have taken over 4 years off our mortgage and saved a lot in interest. We do this as have a tracker and rates very low.