Friday, 28 October 2016 14:48

Should you be overpaying your mortgage?

As it stands we are in an 'interest bubble'. We are experiencing some of the lowest mortgage rates that we've ever seen and people with big mortgages are starting to wonder whether they can start to hammer down that mighty monthly payment that's swinging around their neck.

Because of how things are with interest rates it isn't viable to put money into a savings account but bunging it straight back into a mortgage could really start to make a dent with regards to repayments.

Of course everyone's circumstances are different and overpaying a mortgage should only be done if you can afford it. For instance, if overpaying your mortgage means that you can't afford the rest of your outgoings and it puts you in a tight situation with other things, it really isn't worth it. But if you have a couple of hundred pound left over at the end of the month, rather than putting it in a savings account which isn't worth doing at the moment, throw it towards your mortgage.

It might sound like common sense but don't put all your money towards your mortgage if you have other outstanding debts either. Paying off debts is always of paramount importance. A clean slate will enable you to be in the best financial state.

Most mortgage lenders will allow you to overpay your mortgage but it won't be by much, possibly ten per cent, but that could still make a difference so it is definitely worth doing.

So, what should you do if you have some leftover money, should you put it to your mortgage? Yes. Basically.  Interest rates are rock bottom so even the smallest amount you can throw towards your mortgage will help. Ultimately doing this you will pay less interest generally and your mortgage payments will disappear quicker. Get some advice before making a decision like this and make sure you know all the terms and conditions of your mortgage inside out.

 

We think the time has never been better to chisel away at that mighty mortgage.