Mortgage overpayments

[sonicbook]

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

@Reese123 - thanks & yes it is - hard to believe we will own a property outright in March 2021. Very pleased - putting that bit extra in is so worthwhile.

You probably need quite a bit more than 'that bit extra' to pay off a 20 year mortgage in 7.5 years, unless it is very small. You'd have to pay at least double every month, probably more.

And if your mortgage is very small, is it really so much of a burden unless your income is quite low, and in that case, you probably can't afford to over pay at that rate anyway.

Our mortgage is 'quite small' and the interest rate is virtually nothing. It's less each month than what we spend on groceries, or any of petrol , eating out or holidays (in normal times of course). It barely registers and won't make a huge difference to our finances whether we pay it off or not.

@BarbaraofSeville

You probably need quite a bit more than 'that bit extra' to pay off a 20 year mortgage in 7.5 years, unless it is very small. You'd have to pay at least double every month, probably more.

And if your mortgage is very small, is it really so much of a burden unless your income is quite low, and in that case, you probably can't afford to over pay at that rate anyway.

Our mortgage is 'quite small' and the interest rate is virtually nothing. It's less each month than what we spend on groceries, or any of petrol , eating out or holidays (in normal times of course). It barely registers and won't make a huge difference to our finances whether we pay it off or not.

Yes, we are paying more than double.

However, even if we were only paying a small amount extra, we'd still save a considerable amount. The figures involved when you're talking about mortgages generally make it worth it unless you have other debt or no savings.

The mortgage sadly isn't small though!

We chose to get a longer term and overpay because if one of us loses our job, we could still pay the mandatory monthly payment. We didn't want to commit to the level of overpayments we are making - it's better for us if they are optional.

The figures involved when you're talking about mortgages generally make it worth it unless you have other debt or no savings

You have to check the rates though. Our mortgage rate has been lower than what's available in instant access savings since at least 2007/8 when interest rates dropped, so not worth it at all.

People get obsessed with overpaying their mortgage when it doesn't always make sense to do so. We could pay off at least half our mortgage off today, but wouldn't save any money because the interest on the savings is higher.