Halifax Mortgage HELP!

[Searchingforananswer2023]

Hello, I am currently on a fixed rate of 1.92% which ends next summer. Payments are reasonable but I am worried about the cost of living/% hike when the current deal ends.

In terms of overpayment, should I do the 10% or save a lump sum to take off when I negotiate the new deal? This is the bit I am stuck on. Can I take off a chunk from the total next summer when I pick a new deal, as I don't want to miss the change of overpaying by 10% this year and next? I want to make the right decision, has anyone else done this?

Thank you in advance!

Due to the way interest is calculated, unless you can overpay a chunk now I think you will save more by overpaying 10% each month. The sooner you can do it the better.

I'd overpay as much as you can each month. The effect is accumulative I think so it means you start chipping away at the capital sooner.

Save separately. You can get a good bit more than 1.92% interest in various instant access savings accounts, then you just send the money to your mortgage just before your switch to a new deal next year.

If you can trust yourself not to spend it, you can get way more than 1.9% interest in a savings account.
Then when you remortgage, you pay the contents of the savings account to the mortgage company.

There isn't a repayment limit when you're remortgaging so you can do both - 10% now and a lump sum when you remortgage. However others are right and interest rates on savings are high so (if you can trust yourself) you can pay into a dedicated savings account and use that to pay a lump sum next summer.

You've got the right info there in different comments.

Save your money now in a high interest account you can find.

When your fix ends you can pay as much off as you like before you select your next fix.

Bank of england rate is being annoubced at 12 today. You have a year of breathing space. Definitely be tightening your belt now and put the money in savings to pay off the lump sum. You will then be well adjusted for the higher monthly payments.

There is some awful advice on this thread. Do not overpay a penny if you’re on a low fixed rate until the deal ends. Save it in the highest interest easy access savings you can find (about 4%), in the meantime liaise with the mortgage company about when you can pay a lump sum with no penalty.

Thank you, there is so much conflicting advice but this is what I want to do. I think I need to find the window of opportunity so that this can be completed. this is my first mortgage deal so I was am unsure of the process.

There are calculators online that tell you which is better, overpay or save.

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

It's all down to maths and the savings accounts you have.

If your saving account interest rate is higher than your mortgage then it makes financial sense to save the overpayment in this account and then overpay before remortgaging. If your savings account isn't higher than your mortgage rate, then it's rubbish and you should change it.

We are in this situation at the moment - we have the same interest rate! Before we'd always overpay the 10% but now we're saving it. Our savings account is paying nearly double the interest that our mortgage is charging us.

It does also depend on your will power and whether you can not touch it though.