If you're still on a low mortgage rate

[Curlewwoohoo]

Are you overpaying? Saving? Or just carrying on as normal? Just interested to see if people are taking any steps for when fixed rate ends.

I overpaid for 8 years when my mortgage rate was really low and also saved into ISA. When rates went up high I used all my ISA to pay my mortgage off. It meant I had very little savings left but no longer paying £1.1k each month on mortgage so soon built back savings.

It really is (leaving aside if you'll spend the money rather than save it, or if you have a realistic chance of needing to claim universal credit before the end of the fixed rate period).

The 'maths' is no more than comparing the interest rates and seeing as 5 is bigger than 1, then anyone still on a low rate fix should save instead of overpay, as overpaying means that you're throwing away huge amounts of lost interest.

1.2% til 2027
No point overpaying when our savings get us nearly 5% interest
Hoping to pay the whole bloody thing off by end of term 🙏

We’re on a low fix until 2027. We are overpaying but have been for a while now anyway. We will pay off the majority of the mortgage when the fix is up so won’t be affected by the rate change if rates are still high then.

The mse calculators are very useful

I'm on 1.2% until June 2025. I just about get through the month financially now so I'm already fretting over what my new rate will be.

I'm coming towards the end of my mortgage and I'm fixed at 3% until Oct 24. I'm overpaying as much as I can (despite being anal about interest calculations) as the balance is comparatively low and tbh the difference is less than a couple of hundred quid a year and I might spend it otherwise

I want to get my mortgage fully paid off in 5 years so seeing the amount owed each month drop by more than was forecast is quite a thrill.

If I was closer to the start of my mortgage I'd definitely be saving in a higher % account rather than overpaying, but people's priorities change.

We're fixed at around 2% until after 2030, so saving hard. However in the meantime we'll have kids going to uni and other expenses so not sure whether we'll be able to pay off a lump sum when our fix runs out. The difference in interest rates between savings and our mortgage means that there's no point overpaying - it goes into savings accounts (not instant access!)

@Curlewwoohoo

Nationwide has some good, easy to use calculators. I use the over payments calculator and it's really easy to manipulate to calculate lots of different things.

mines 2.58 a lot higher than most here, but also a lot lower than current rates. I still have 4 years on that. I'm hoping to move & port that to keep a percentage lower than current rates. I put what I would overpay in a saving account, if I don't move I'll pay it off the mortgage when this fix comes to an end.

im not sure what I'd do if I wasn't thinking of moving, this makes more sense still, but I think I'd enjoy seeing the mortgage go down faster 😂

Overpaying and saving, cash, pensions, ISAs. Still supporting DH through university so hobbies and other expenditure have been cut down and treats are planned for very carefully! Christmas will be spendy on entertaining, but then it will be lean again in 2024. I'm trying to ensure we can both retire early so going hard at it now makes good sense. While closing my eyes to the broken sofa and the tatty kitchen...

Ours comes to an end in 2024, we’re saving every penny we can to hopefully pay it off in full.

Ours is up in Nov 24 - currently on 1.8%. We've overpaid since we first got the mortgage and have about £75k left. We are continuing to overpay by about £200 a month, but have also locked away different pots of savings to pay off a chunk at the end of the term

Saving and overpaying what I can on a 1.17% until 2026.

I fixed mine as the rates were starting to creep up so repayments are about £20 a month more than they were. It's fixed for 5 years so I'm making a conscious effort to overpay and would really like to have it paid off by the time this finishes (I have 10 yrs left but some savings that I could use towards clearing it).

We have a year left in our fix of just over 2% on a small mortgage. When interest rates were low we over payed mortgage but now we get nearly 5% interest in savings so makes more sense to put it in the savings account to accrue interest and then overpay the mortgage in a lump.

We have 2 years left on our low rate. We are overpaying by £100pm, I know it’s better to save it but I’d find something to spend it on so I prefer this way! Our youngest DC will start school a few months before the rate needs to be renewed. I had been looking forward to having that extra cash but looks like it will all be going towards the higher mortgage payment. Oh well… 😂

It really isn't @BarbaraofSeville! Eg what if you're a high earner and pay tax on your savings interest rate? What if your mortgage has a clause that means overpaying reduces your term or not? What if your mortgage rate is higher but the overpayment fee is substantial?

Thankfully my mortgage will be paid off before my low interest rate ends.
My son works in finance and sorted it out for me before rates went up.

what if you're a high earner and pay tax on your savings interest rate

So you compare the after tax interest rate (and also look at ISAs and Premium Bonds). When you're comparing 1-2% vs 5%, even if the interest is taxed (it won't all be unless you earn £150k+ and don't use cash ISAs) it's still likely to be better to save rather than overpay.

What if your mortgage has a clause that means overpaying reduces your term or not Irrelevant. If you're talking about regular overpayments, you just keep sending money to your mortgage account until it's paid off, the 'term' is meaningless.

What if your mortgage rate is higher but the overpayment fee is substantial Also irrelevant on a thread about people on low mortgage rates.

I’m on 0.97% for five years (until 2027).

I save about £500 a month rather than overpaying as even if interested rates climbed to 15% could afford my payments and just cut back on things like holiday savings (I am v. lucky and was v. diligent in checking worst case scenarios before I took out my mortgage).

I could overpay, but I like having chunky savings for a rainy day + saving for a few nice holidays a year. Personal choice.

Attending to some other debt now, so we can attend to the rate rise on the mortgage when it comes (also in 2025). Would and will overpay in the future, at either rate, when possible

I'm going from similar with a relatively small mortgage, actually impact is only just over £100 a month more.

We're still on 1.9% until end of 2026. We've upped our monthly overpayment so we're overpaying by around 50% extra per month. We do still make sure we save a good amount too though as I've got some good rates on savings bonds for 12 months which I'm hoping to use to do another bigger overpayment once they mature. My aim is to get the LTV down to a good % by the end of the fixed rate term so that it might make the next mortgage less shocking for us.

We’re on 2% until September 26. We’re saving as much as possible but also need to do work on the house. We’re praying the rates come down when we remortgage as we’ll only need one more term and it’ll be done. It’s been a hard slog.

We are just carrying on as normal. We have another 3 years before we need to re-mortgage. But we do have savings. We aren't saving 'for the mortgage' because there is flexibility still in our monthly budget. We aren't on our knees financially and could cut plenty more back in spending. But I do still expect it will go up in 3 years time. We locked in at pretty much the lowest possible rate, which we are very fortunate for.