mortage overpayments?

**The Agents View** · 8 October 2010, 15:56

Originally posted by filthy1980 View Post

wondering what people thoughts are on overpaying on mortages at this point in time.

my current situation is i'm 3month into a 6 months contract, 50-50 on an extension, have abt 15k warchest at the moment, all things being equal this will be 30k at the end of current contract

have the option to overpay on mortage at the end of the month, currently paying £700 p/m, if i overpay by about 10k it would reduce my payments to about £630 ish, have no major other debts not planning on splashing out on new car or anything

would like to do it, but just wondering whether it would be sensible in the short term given the state of the market

sorry if this is meant to be in accounting and legal but question kinda spans the market at the mo so stuck it in here

It depends how long that £30k will sustain you for. If £20k will leave you OK for 6 months, then I'd pay the £10k off and have done with it.

We bought at the height of the market, and have put a couple of chunks in to stop us from losing all of the equity % in the house. At the least, it'll do that for you, and if things pick up again, you'll be in a handsome position moving forwards - either paying quite a low amount, or by having enough equity in the house to step up the ladder....something which is a long way off for me right now!

HTH

**oversteer** · 8 October 2010, 16:10

What are the short and long term predictions for interest rates?
What effect will those have on your mortgage repayments?

**nomadd** · 8 October 2010, 17:19

Originally posted by oversteer View Post

What are the short and long term predictions for interest rates?
What effect will those have on your mortgage repayments?

Stable. Up. And Up. (BTW, mortgage rates have long since become disconnected from BoE IRs. Still, think "up".)

**CheeseSlice** · 8 October 2010, 17:46

I dont know about anyone else but if it was me deciding on this, I would sod the overpayments and keep the warchest big and healthy for the time being. Do the overpayment bit when the economy and markets are looking healthier, or if your skills are in such high demand you wont have a problem finding your next contract.

**northernladuk** · 8 October 2010, 17:49

Do a google for a mortgage overpayment calculator, a little now makes a huge difference at the end even when rates are low. It is quite surprising what 100 quid extra a month can do. Give it a go and see.

A lot of people are giving up on pensions and overpaying mortgate so they are free of debt when they retire instead of gambling on a crap return from the pension.

Can you draw down if you over pay? If so double bonus.

I would say fill your boots as soon as possible. Even if the rates are low and may not seem worth it now you will be quids in when they start going up again. Once they are up it is too late.

**filthy1980** · 8 October 2010, 18:09

thanks for the opinion fellas

i think overpaying now would save me around 22k over the course of the mortgage, normally i'd jump at overpaying

but the current state of the market has got me thinking,

might just pay of a 5% this year rather then the 10% i can do

**Wanderer** · 8 October 2010, 21:04

Originally posted by filthy1980 View Post

have the option to overpay on mortage at the end of the month

Don't mess about with these namby pamby sort of flexible ones where you over pay it at certain times or you can't take back the money you over pay.
Get yourself a proper flexible mortgage where you can treat it as a big overdraft and over/under pay as much as you like.

**Waldorf** · 9 October 2010, 10:09

Why not get an offset mortgage, that way you get the benefit of reducing your mortgage but the option to access the funds if you need to.

**Muttley08** · 9 October 2010, 11:49

Offset mortgage like the last poster said sounds the best - don't let the warchest get too low...its still tough out there

mortage overpayments?