Mortgage overpayments

[sonicbook]

Is it worth overpaying you're mortgage by 50 quid a month or is it absolutely pointless?

Your

Yes, definitely worth it. Use a mortgage overpayment calculator to work out the interest you could save

If you are allowed to without penalty and you have other savings for emergencies absolutely.

We can draw down overpayments without penalty so it acts as out savings.

Definitely worth it.

Use a mortgage overpayment calculator and it will show you the years of payments you will save.

If you start early enough it really can be that much.

Probably worth it - Google a mortgage calculator and put your details in - but it may be better use of money if you have less than about 10 years left to put more money into a pension instead, and then use the lump sum on retirement to pay off the rest of the mortgage.

Also consider if your mortgage overpayments can be used to take a payment break later, should you be in financial difficulty later.

But yeah, probably worth it and get you mortgage-free a couple years earlier.

Yes.
I only did £10-£20 extra a month. It still got me to the halfway point sooner.

Definitely worth it. We're overpaying by £100 and it's taking 3.5 years off our mortgage term.

I overpay by £100 per month. Any overpayment goes straight off the loan so you end up paying less interest over all. Anything is better than nothing.

Yes unless you have higher interest debt elsewhere then pay that off first

Google overpayment calculator, you'll be able to see how much time it drops off your term and therefore the interest. I think you'll be surprised the impact it can have. As another pp says prioritise higher interest rate debt if you have any, though.

Totally worth it. We were paying an extra £50 and then upped it to £100. It has shaved 4 years off our term and when you are paying £100's a month in interest, the saving soon adds up. It also means I might be able to retire before I'm 60, just 😁.

We did it in our old house and it was a good discipline to get into. Initially we overpaid by a tiny bit and how much we needed to pay each month reduced but kept the payments the same, then increased them when we could. Barring lottery wins and inheritance, you don't wake up one day and suddenly have 'enough' to be worth overpaying. Depending where you are in your mortgage term, that is £600 a year that you aren't going to be paying any interest on for the next 20 years. £600 doesn't sound like a huge amount, but after another year it is £1200 which does!

On a small mortgage definitely. If your mortgage is for mid to high six figures, probably less so.

Yes definitely. Just make sure it's going towards reducing the term as opposed to reducing your payment for next month.

Yes definitely, I do this. I think it knocks about 6 months off the mortgage term for me.

Well it's always going to pay it off faster, which is usually a good thing, however there are caveats.

You need an emergency fund, as you can't always get overpayments back.

If you have higher interest debt elsewhere, pay that off first.

If you are planning a big purchase that you might borrow for, you'd be better saving the money for/towards that.

Check your rate. The rule of 'saving thousands in interest by overpaying' no longer applies in a lot of cases, overpaying could actually cost you money as your mortgage rate might be so low that you can get more interest by saving the money instead - ours is under 0.5% so what would be overpayments go into a NS&I account that pays 1%.

However, only do this if your income is secure because if you needed to apply for universal credit and it built up to more than £6k, you'd be expected to use this money to live on, which you wouldn't if you'd used it to overpay your mortgage, or spent it for that matter.

Yes if the following are true...

You don't have other debt at a higher rate of interest

You do have some savings (recommended 3-6 months living expenses) seems highly unrealistic for most but a little bit for emergencies seems sensible.

I have found over the years that in an average income, little and often is the very best way to save including chipping away at the mortgage through overpayments. Money Saving Expert has a good online calculator, it is quite inspiring and if you are otherwise a bit rubbish with money/life goals (unheard of on Mumsnet of course!!), it can be a really good target to aim for.

I borrowed £100k over 30 years. I've been overpaying by 50 quid (sometimes up to £100) every month. Just renegotiated my rate and if I keep my payment amount the same (ie including the £50 that I've been paying anyway) I've reduced the term by 5 years.

I'll keep trying to find ways to overpay going forward, even if it's just £20 a month to begin with.

Relatively small mortgage, £50 makes a big difference.

Definitely worth it - myself and DH have been overpaying for the last 10 years and have shaved 5/6 years off our mortgage. The mortgage is due to finally be paid off in 8 months time.

Our £50 overpayment will knock 9 years off our term and save us approximately £6,000 in interest. Definitely worth it!

Apairofblueeyes001 wow that’s fantastic must be such a great feeling

Definitely worth it, take a look at mortgage overpayment calculators for motivation.
I have a monthly standing order but also every time I get any extra cash (eg overtime pay) I pay a bit of that into the mortgage too.

Definitely worth it. We took out a 20yr mortgage last year and are making overpayments. If we carrry on doing so at the current rate, it will be cleared 6.5 yrs from now and we'll save a shedload of interest

However, if you have other debt, I'd aim to pay that down first.