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?

We used to pay an extra 300 on a 1500. We’ve just upsized now so have a much bigger mortgage so don’t overpay anything. However we max out our LISA yearly in a stocks and shares account, plus other ISA stocks and shares contributions so will just pay a bigger lump off when we remortgage.

We don’t - we put £800 a month into a S&S ISA that out performs our mortgage rate and will use that towards the mortgage when we next remortgage in 2029. Monthly payments are £1,250.

My brother argues the same and this is correct- but being mortgage free removes for me that worry of what if…. What if you lose an income, one gets ill so other has to care, what if rates also go right up again (I’ve factored in rates of affording 12% rates a la 90s at one point). The sheer freedom of not having the mortgage millstone, owning such a great asset outright has psychologically made such a difference to my mindset and attitude in life and choices! Best decision ever.

It wasn’t satisfaction driving mine (though my goodness did I have the BEST feeling, and still do 😁) it’s about mitigating the risk from future changes in circumstances. Insurance to pay mortgages off is incredibly expensive, or illness cover to go beyond a year etc- and these are frequently refused so not a done deal either. For me, it protected us against those. Yes, we may need to massively scale back spending if a crisis happened, but we wouldn’t be at risk of losing the roof over our heads and or a precipitous rise in interest rates.

But if you have savings because you've not paid your mortgage off, you still have access to that money for those things.

And you'll be better off because your savings grew faster than the rate your mortgage cost you.

We're mortgage free now but it doesn't feel any different. And when we did have a mortgage it was making a profit so it didn't feel like a millstone.

I just don’t view my mortgage this way. I know some people see their mortgage as a huge weight on their shoulders, I don’t feel that any more than I do for any other bill I have.

I actually feel great privilege having a mortgage, coming of age in 2008 it certainly didn’t feel guaranteed! Not everyone gets to pay a mortgage and then have an asset at the end of the payments, DH is the first in his family to own a home.

I’m far more scared of getting to 68 or my health declining and not lived a full life with lots of experiences than I am of any potential drop of income. I’d rather be in my 50s finishing off my mortgage payments knowing I’ve given as much as I can to my kids and their childhoods and my own youth, than sacrificing parts of that to then be mortgage free earlier.

I’m sure it’ll feel amazing when it’s paid, it’ll come, in the meantime, lots of other things I want to do.

we overpaid the max this year (it was 20k) as my dp received a big bonus and he is a high earner so he is taxed on any savings interest he earns, therefore this was the best way for us. will probably continue to do the same going forward.

My mortgage - and lots of others - only allow 10% of the amount to be paid extra a year. So if your mortgage is 120k you could pay off 12k, but the next year it would be less as you have paid off a lump

Ours is a variable rate so I don’t think we are limited.

^^

We paid ours off so I can't speak for present day but when we were paying it off we were doing £15k a year - this was 4 years ago.

Mortgage £650 and I overpay £200. I should have 12 years left and only have 7. I am well ahead of target. When I can remortgage in a couple of years I should have only 5 years left not 10. At that point I will remortgage on the cheapest rate for 2-3 years and hope I can pay it off in that time.

I do pay the full 10% off a year that I am allowed to pay, so whatever allowance is left over the £2400 that I have paid, I pay in full in December, so that was another £1200 in Dec 25.

When the mortgage stops I will continue to save £650 a month into savings for my old age.

The mortgage interest is higher than I can get in savings thanks to the Truss debacle a few years ago , coming right when I needed to remortgage.

I only pay a tiny £10 a month because I want to overpay something. I’d overpay more, but interest on my savings beats my mortgage interest rate.

No, we've done the calculations. We'll likely pay our mortgage early (15yrs rather than the 40yr term) and have saved around £30k in interest in that period. Putting the same amount in savings would not have gathered that much interest in that period of time. Plus the interest rate on the mortgage will jump so we're better paying more in early to avoid that extra interest. Trust me, we did the maths.

Your maths was likely wrong. HTH.

Or your mortgage is more expensive than it needs to be and your savings account is rubbish.

I cannot remember a time in the last 20 years when it hasn't been possible to get a higher rate on savings than typical fixed rate mortgages. And that's before you start thinking about investments, which will almost certainly vastly outperform mortgage interest rates over time.

What's your mortgage rate?

1.65%

Then your maths is way off - you're crazy to overpay at the moment.

We don’t overpay regularly, but when we remortgaged we paid off a lump sum and reduced the term left by half. So we’re paying the same we were before but will pay it off in half the time. It’s about £700 per month difference to if we had just continued the amount of time that was originally left on the mortgage.

Duplicate post

We overpay £250, our mortgage is 650. That puts us about in line with what we'd be paying if we were renting. We only started after ten years though, would have loved to have done it before but our house needed a lot of work and it made sense to use our income and savings rather than take out bank loans.
We could overpay more if we had to, but I would rather put money into savings so it's there if I need it, plus our fixed rate is quite low (for now!)

Overpaying? What’s that? Laugh-crying in SE England mortgage 😭

Of course it's an option. Open an investment account. Even if you're in the middle East, there are Islamic investment vehicles or you could just put it in a US fund.

I'm an immigrant and would prefer to have it invested so that's it's reasonably easy to access. If you need to leave, you don't want all your assets in property, and you're more likely to need to buy support for you or your kids. Asset rich, cash poor is not a sensible strategy for immigrants, even in a safe country. In in Europe, and the change to visa rules following brexit had massively increased how much college fund I need for my kids and substantially increased how much I have to pay for bureaucracy

I explained why it wasn’t an option the ones with any type of decent high percentage return are too high risk. Savings account here give a max of 3% interest and others with higher (of which there are very few) have 41% tax on profits…its pretty much not worth it.

Ours is £1150 and we overpay £300 a month. We’ve only got 4 years left on it though so the balance is a factor too that is taken into consideration with overpayment.