To ask how much you overpay your mortgage?

[Changingup]

Our mortgage is 1991 per month. We have got to a point where we have a good savings amount. We want to overpay the mortgage by 1k extra per month. We would like to pay it off completely over the next 10-12 years. If you overpay how much do you overpay by?

I'm confused - for people with such low mortgage interest rates, why do you overpay your mortgage at all? Wouldn't it make more sense to invest that money elsewhere, eg in ETFs, private pension, or even in a savings account with higher interest than the mortgage?

Years ago we overpaid by over a grand a month, because we wanted more equity as we were saving for our next house. Now that we’re in our forever home we are not overpaying at all (£2,500 pcm mortgage, also North but an expensive part) as we fixed on a low rate so we’re piling our cash into pensions and investments for retirement.

@HoskinsChoice but I can't ask my friends these questions. There is no way they would talk about their mortgages either how much they owe or what their monthly payments are.

There is literally one person I can have an open and honest conversation with about money. Threads like this are helpful as MN does cover a wide range of incomes but not everyone posts.

I don’t. I know I should but we haven’t really got the spare money at the moment.

I used to overpay the grand total of £20. Lone parent on benefits and working.

It still got me to the halfway point quicker.

We aren’t yet, but the answer is to be mortgage clear by retirement. Currently we are mortgaged until my DH is 70.

Lots of people unable to buy their final family home until mid late forties are in that position .

It’s varied over the years. At present £30 but when I renewed the deal last month I reduced the term from 17 years to 11 so my payments increased.

I don’t think it occurs to a lot of people. The money is still there if you need it.

10% of the balance every year in one chunk. Our fix comes to an end later in the year so we will do a big overpayment as part of the refinance hopefully halving the remaining balance.

The hope is to get the whole thing paid off in the next 2-3 years.

I put £250 a month into a 12month saver high interest account then pay that off against the mortgage once a year. Mortgage is £600 so with interest and other bits I throw at it about 50%.

At the risk of sounding like a Viz top tip, you too could have a 'lovely small mortgage' if you lived in a small house in an unpopular area.

But where do you live where you don't have access to savings accounts and investments?

I would have thought that pretty much any country had banks and other financial institutions that offered these?

I know. It's like winning the lottery and burning the ticket.

10% as that is the maximum I can pay
Ive only got a few years left thankfully

But it still wouldn't make sense in this scenario - you'd be better off saving it, growing the money and then paying it all off on retirement. Depending on your pension amount it may still not be sensible to do that either of course.

I think the real answer is that people value the satisfaction of having paid off the mortgage enough that they're willing to be worse off over all to do so. Which is totally fine of course!

We save lots in ISAs, stocks etc, kids savings monthly too so its part of a more holistic financial plan - we ensure our savings are healthy and topped up, take advantage of ISA allowances and also reduce our debt. We're also remortgaging in Aug and paying off a chunk now means a lower LTV for the next mortgage which equates to better interest rate offers.

My tax band also means the interest I get in savings outside of ISA allowance isn't actually that good once tax is taken!

We have access to savings accounts of course we do but they do not have better interest rates that would counteract the interest on our mortgage. Anything with day 5-10% returns in typically involve a lot higher-risk. And there is a high exit tax on profits too…

Would it be better for me to invest my £400 overpayment each month then rather than overpay my mortgage? My mortgage interest rate is 4.85% fixed until beg 2029. I just worry about investing in case I lose my money! I just want to be mortgage free as I retire in 13 years time and still owe £105k.

Nothing at all at the moment. It’s just not a priority, while we have kids at home the priority is raising them comfortably, having great holidays, school trips, nice home etc. Life is too short to prioritise savings too much in my view. But we had ours young, ours will be adults when we are only mid 40s so while we are currently due to pay it off by 68 I hope to do so at least 10 years earlier when we start paying more down in our 40s. We have excellent pensions so don’t need to worry about that.

I over pay our mortgage by 20%

Noone can answer this because it's a wider question based on when you need the money and attitude to risk too. My investments are in the FTSE, SP500 and global index fun. Average returns project at 7% to 8% but you gave to ride the ups and downs of the markets. The perception of losing money in stocks is more based on day trading and single share trading. Investing in broad funds is a different game. I do have instant access money too and wouldn't invest at all without a strong emergency fund in instant access.

Suggest you look at Rebel Finance school ☺️ it might help you understand more so you can make some informed decisions

Check your small print as usually you can only overpay by 10%. Ours is £800 but will rise next year which we are worried about.

We’ve had our mortgage 7 years now overpaid by £20k. That’s my half of the house paid for.

I no longer work due to my health so moved around my last year of wages for interest for a few years then last year it wasn’t worth it so I paid off a lump sum. so that’s my half of the house paid off, we bought with a large deposit I had saved up for years. But I now have no savings so it’s a worry.

we are older, me especially, when we bought our house so we have to pay it off as soon as we can. My oh was also threatened with redundancy three years ago and the field he’s in normally in 50s they will let you go. So trying to get it as low as we can.

Our situation is not the norm.

We have overpaid £1000 a month for some years. At a time of low interest rates it was still a good bet alongside more volatile investments, and we had already maxed out pension and ISA allowances. When we had to remortgage after the mortgage rate went up, we were very glad we had done. On the same term at a higher rate but with less to repay, the recalculated monthly amount was the same as before.

This is madness. You shouldn’t over pay, you should save that instead and then pay it in when the low interest period is over, when I had a low rate I used the mortgage charter to go interest only and I saved the difference and made loads in interest

I’m on 30k i’m poor my Mn standards 😂

we were just lucky to get a house at a low price it’s now worth over £300k so have equity but we were in our late thirties so don’t have as much time. Also no children so have different outgoings.

Mine is now paid off (thanks to a lot of overpayments and a small inheritance) but I always paid at least 12% over the monthly payment since the day I moved in. My mortgage was originally 30 years, which dropped to 22 years by the 5th year of paying.

I also live up north and my mortgage was comparatively low but you need to check with your lender if you can make overpayments. Mine was £500 a month allowed in overpayments AND 10% on top.

You could always consider reducing the term which would raise your monthly payment by £x and still make overpayments on top.

Every penny really does count when it comes to mortgage interest!