Overpay mortgage if shared ownership?

[namechange1238]

NC as details may be outing

I have in a shared ownership property in London where I own 25% and do not plan on increasing this unless I could buy the full 75%. Which is unlikely in the foreseeable future (buying anything other would make it more difficult to sell as I need to be able to sell to someone who can take over my share and I have seen others struggle to sell when they have a larger share). I also do not plan on being here forever- it is not a forever home.

I have 4 years remaining on a fixed mortgage at 1.63%. Approx £125,000 on mortgage, 34 years repayment left.

I could afford to pay, say, £100 off extra a month and I'm trying to decide if I should do this or just try and save it? Savings accounts are around 2% so technically I would earn more saving it now. But given that I might need to remortgage in 4 years (if I don't sell and buy something else/with a partner etc) should I be concerned about paying it off the mortgage instead in case the interest rates are still really high in 4 years if I remortgage? Then I'll have increased my ltv a bit?

all the info online applies to normal mortgages where they say if you pay it off more each month then you'll end the mortgage sooner etc...whereas even if I was to stay in this property for the next 20-30 years and pay off the mortgage entirely, I'll still only own 25% so I'm not sure if it's worth it.

Any advice gratefully received!

The main question is, will you be able to afford it at 5% plus in 4 years time?
And do you have enough deposit and equity to buy something else if you find a buyer?

I would save it and earn the higher interest then when you come to remortgage you can decide whether it's best to use it to reduce the amount you're borrowing - rates will hopefully have gone down from where they are now.

First thing; do you have a rainy day fund saved up? If not ,that should be your priority. Regarding the mortgage...How much is your rent per month? Any work bonuses coming your way?

You can use the staircasing calculator to give you an idea of the costs involved if you want to buy more shares
www.sharetobuy.com/staircasing-calculator/
I would try to overpay the mortgage as much as possible while you are on a low fixed rate. You can always increase your share using your equity in 4 years time . You may struggle to buy the extra 75% in one go ,there is nothing stopping you from increasing your share to 40 or 50% if you can afford it. It doesn't make sense to pay off the 25% and keep paying the rent for the next 30 years (which increases every year).

At 25% you don’t own much equity - do you actually benefit if house prices fall? Like say 50%, would you be able to buy the 75% you don’t own at market value?
You will still need to increase your loan to buy more shares.
And it may not be worth just buying another 10%, with an additional set of legal fees and valuation. And I’ve seen how much some of the housing associations charge.

Thanks for the replies

Just to clarify again - I am not ever planning on buying more shares unless I could somehow get to 100% to remove the shared ownership aspect - which is not possible atm! I don't think it is wise to buy any more shares as it needs to remain affordable for future buyers and I have seen a flat in the building where they have staircased to 40% then struggle to sell. (Because the proposed purchaser would need to be able to get a mortgage on that larger amount and pay the rent of other portion, but still earn less than £80 if an individual or for couple £90K combined which I can't really see happening) I'm fairly sure I'll be out of the property in the next 10 years if not sooner.

No, I don't really have a huge amount in savings so I appreciate it's good to save there but I struggle a bit with discipline for savings! I think I would be tempted to dip in to it if it was there, rather than if it was being used to overpay mortgage.

Yes I have a decent amount of equity in the flat already though and I actually believe the flat will have gone up in value a lot in another 4 years too (rightmove claims it's already increased quite a bit in a year). I would be able to afford it at 5% but would have to change lifestyle a lot.. But ultimately I'm not planning on staying in this flat forever so it's tricky!

I think perhaps the best idea is to try my best to save each month and if I am not being disciplined enough then I start paying overpaying instead. If I do manage to save then at the end of each year, right before my deadline for overpaying, I make a decision if I'm going to overpay some then?