how beneficial is over paying your mortgage

[JRmumma]

Been giving this some thought recently. We have a mortgage that we can pay comfortably. Its over 25 years, we are 3 years in so 22 years left, but want to move in the next 2-3 years to a bigger, so probably more expensive house, so would need a new mortgage and would start again but with a bigger deposit (with the equity we have in this house).

Say we pay £800 pcm. We are allowed to over pay by 10%, either each month or as a lump sum each year but so far haven't. We could afford to overpay, but this would require cutting back in other areas, possibly savings or reducing the amount of free spends we allow ourselves each month.

I'm just wondering whether it is worth overpaying for the next couple of years, or putting the money away to cushion other moving costs or pay for things we needed to do to the next house.

Would we see a real benefit to over paying this mortgage, or would it be better to worry about this when we get to the home we plan to stay in long term? I cant get my head around whether we would see a real difference in the equity we have (deposit on next house) in a short period, or if its not really worth it on a mortgage we would get rid of in 2-3 years?

Is anyone able to explain it to me in simple terms?

Thanks!

Another thread under moneymatters was also looking at this.
We totally paid off the mortgage on one house when I was about 33 which was a huge relief. Then really stretched ourselves to buy this large one but only on a 10 year mortgage (which in a sense is over paying). It should be paid off in 1 - 3 years' time and that will be a relief even though I currently pay only 3.1% interest on it.

is it worth overpaying? Only if you can afford it. I think for most people it's better than investing in shares or something riskier and is a good discipline. If you think you cannot force yourself to overpay and would just spend the spare money do consider taking out a shorter term mortgage IF you think you can manage the repayments such as a 10 year or 15 year loan as then a lot of what you pay back each month is capital.

I suspect one reason I have done rather well was that toddler deferment test stuff -putting off what I want today for a better future which in simple terms in this thread is paying off debt now even if it means few meals out and no Starbucks today because it gives you security and wealth and more money later and to be mortgage free in case later in life you lose your job etc then at least you have no rent or mortgage to pay.

We were in a similar position and overpaid our mortgage for several reasons. Firstly we needed a bigger deposit for the next house so 'saving' by paying off the mortgage seemed to give us the best return. Secondly if you find for example you need 40k for the next house and 10k in fees it doesn't matter if you have 40k equatity and 10k in the bank or 50k equatity, you can still put 40k on new house and spend 10, so again what's the best way to make your money work.

However, the most important reason for us was it got us used to making larger mortgage payments so we were sure we could live comfortably in our new home.

Do it. And aim to do it wherever you live and whatever your mortgage is whenever possible. Don't just think of it in terms of these 2 years but the bigger, longer picture. As someone says up thread, a major cause of some people being better off than others by their 40s is getting the mortgage paid off quicker. Even if you only do it for a few years, it will give you more flexibility at crucial points in your life, because you will owe less, so will be able to reduce your payments short term if you need to. I know people for whom 10 years of overpayments has meant they could spend more time at home with a baby on maternity leave, than they could have done otherwise, or allow their husband to do a masters and work part time for 2 years. That flexibility is well worth it.