2022-11-25 07:00:52

Should I overpay my mortgage while the rate is still low or save the money in cash?

Logo Daily Mail
Daily Mail
By Ed Magnus

I was lucky to fix my mortgage last year when rates were cheap, and I've got four years left paying just 1.29 per cent.

My lender will allow me to overpay the balance by 10 per cent each year.

Should I do it? Or am I better off saving the money, putting it in Premium Bonds or even investing it?

I can get 2.81 per cent on an easy-access savings account, higher than the interest on my mortgage debt.

When it came time to remortgage, could I use that cash pot to overpay the mortgage and potentially cut my interest rate? Via email.

Ed Magnus of This is Money replies:This a question that many homeowners will be asking themselves given this brave new world of higher mortgage rates.

While the cost of living is rising, any spare cash diverted to paying off your home loan today could save you much more in the future if it meant you could move up a loan-to-value band and get a lower interest rate next time you remortgage.

As mortgage rates rise, you must be feeling incredibly smug to have nabbed yourself such good deal, particularly as you are locked in for the next four years.

Continue read on dailymail.co.uk

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