interest only mortgage holders, are you still overpaying ?

[fishsupper]

we took out a mortgage ithis may, it's interest only with a 10% overpayment facility, we have been overpaying by £860 per month.

reading the papers about london house prices tumbling, it's all very worrying...

touch wood dh job is fine.... but who knows! i am expecting dc2 so no income.

question/thoughts - would you carry on overpaying or stash the cash??? we have some savings..

We have just sent our first payment but waited until we have two years of ISAs as they currently pay more interest than we pay on the mortgage plus are available should DH lose his job. From now on anything spare goes straight off the mortgage to put us in the best position possible for when our fix runs put in a years time.

I think with things as they are paying off much as you can makes very good sense, just make sure though that you do have available cash in case of an emergency.

why - what could happen? We have an endowment is that the same?

No cornsilk - an endowment isn't the same. That is a savings plan designed to provide a lump sum to pay off the mortgage at the end of the term. With an interest only mortgage there is no investment vehicle, so you either need to overpay, or have a way to suddenly come up with the total loan value.

We are still overpaying, yes. Our mortgage is flexible though, so we can get the money back out again if we need to.