Paying Off Mortgage Early

[crE]

Hi all,

I have a 30 year mortgage for £69,000. I have 23 years left and the balance is £60,000. With Alliance and Leicester.

I'm on a tracker (I think) and paying £345 per month.

I've started doing some freelance work since January (whilst still maintaining my full time job) which is going quite well. I've made £4,000 (ish) up until now.

As much as a "Round the world" cruise would be lovely! I'm trying to keep my sensible hat on.

My questions are - should I overpay on my mortgage? If so - are there any penalties? Should I overpay as and when I can? Or should I save it up off and pay it off in bulk?

This is new to me, any advice would be most appreciated!

[Deft]

Depends on the specific terms of your mortgage. Most have restrictions on overpayments during any fixed or introductory rates.

So basically, check your mortgage docs. Worth remembering that interest rates are low so in some ways it's good to pay down the debt before interest rates rise. Or you could take the contrary view and try to invest the spare money somewhere and try to beat your current interest rate in terms of returns. Stocks and shares ISA for example.

Edited May 21, 2016 by Deft

[GreenDevil]

Have you not heard about btl, everyone's doing it!

[renting til I die]

Hi all,

I have a 30 year mortgage for £69,000. I have 23 years left and the balance is £60,000. With Alliance and Leicester.

I'm on a tracker (I think) and paying £345 per month.

I've started doing some freelance work since January (whilst still maintaining my full time job) which is going quite well. I've made £4,000 (ish) up until now.

As much as a "Round the world" cruise would be lovely! I'm trying to keep my sensible hat on.

My questions are - should I overpay on my mortgage? If so - are there any penalties? Should I overpay as and when I can? Or should I save it up off and pay it off in bulk?

This is new to me, any advice would be most appreciated!

Well you should be in a better position than me to answer those questions!

If you are in a position to overpay and you really don't need the money for anything else, then, yes you should overpay. As for penalties, you would be best contacting your lender and asking them. Generally, most mortgages will let you overpay up to 10% without additional fees, so this is a no brainer, but as I said, contact your lender.

Edit to add: Paying off in bulk (ie. pay it all off) is a harder question to answer. There can be early repayment changes for this and you have to consider (if you have a pile of cash) what returns you are currently getting.

Edited May 21, 2016 by renting til I die

[nnails]

im in much the same situation. do i replace my 11 year old car or do i overpay my mortgage.

if you overpay you would save 34 per month for next 23 years you would save nearly 10grand. Also if for whatever reason you without job in futre overpay will help keep the bank sweet (allegely).

i know im going to have to replace my car soon as it as aleast 3 minor non mot faults

[crE]

Thanks for all the advice!

I'll give my mortgage provider a call.

nnails - do what I do, I buy a car for around £700 and just drive it into the ground. I usually only end up getting a new car every 3 years!

[sPinwheel]

Have you not heard about btl, everyone's doing it!

Innit.

[nnails]

Thanks for all the advice!

I'll give my mortgage provider a call.

nnails - do what I do, I buy a car for around £700 and just drive it into the ground. I usually only end up getting a new car every 3 years!

yep i know it sensible to pay mortgage of and foget about the car but i am tempted to get 4 year and run it for 6 years like i did my existing car