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    is it worth putting £1500 into my mortgage ?

    I'm currently in a 2 year fixed rate as of last month. I have £1500 spare but is it worth putting into a mortgage which over £100,000 would it just be like a drop in the ocean and I won't notice any difference whatsoever . ?

    17 Comments

    Keep it for a rainy day

    take a punt on an investment ISA, the pennies it will save you pcm will just depress you!
    Edited by: "PaulTheYid" 6th Sep 2016

    Original Poster

    Yeah I imagine I won't notice a thing . Lol

    You shouldn't look necessarily at what it may save you per month. If you have a flexible mortgage it may well make a hugely disproportionate difference to how much you finally pay, bearing in mind it could also cut short the term of payment by several months. Why not just ring your mortgage provider and ask them for a brief illustration?

    Is it spare as in if your car breaks down you already have money set aside that you can pay for it without touching the £1500?

    Depending on the mortgage term it could drop a few months or it could drop a year off the total.
    However most mortgage companies only allow a 10% overpayment of the monthly amount without incurring any fees so you normally can't just pay off £1500.

    Wait for the Apple event tomorrow.

    Every little bit helps, but I would keep that amount as an emergency fund.

    joedastudd

    Is it spare as in if your car breaks down you already have money set … Is it spare as in if your car breaks down you already have money set aside that you can pay for it without touching the £1500?Depending on the mortgage term it could drop a few months or it could drop a year off the total.However most mortgage companies only allow a 10% overpayment of the monthly amount without incurring any fees so you normally can't just pay off £1500.




    In my experience, it is 10% of the mortgage sum, so it would be in excess of £10,000 for the OP.

    Keep it, add to it and when your 2 year fixed rate is up and it's time to remortgage use the money you've saved to increase your loan to value on the mortgage. This should allow you to, if you have enough money to, get under either 85% ltv or 60% ltv depending on what's outstanding on your mortgage. The better rate would in turn allow you to shorten your mortgage by a number of years which decreases the interest you pay overall.

    Scoop1

    Keep it, add to it and when your 2 year fixed rate is up and it's time to … Keep it, add to it and when your 2 year fixed rate is up and it's time to remortgage use the money you've saved to increase your loan to value on the mortgage. This should allow you to, if you have enough money to, get under either 85% ltv or 60% ltv depending on what's outstanding on your mortgage. The better rate would in turn allow you to shorten your mortgage by a number of years which decreases the interest you pay overall.


    His LTV will be reduced by the over-payment anyway

    scrumpypaul

    In my experience, it is 10% of the mortgage sum, so it would be in excess … In my experience, it is 10% of the mortgage sum, so it would be in excess of £10,000 for the OP.


    isn't 10% the upper limit? I know that is the case for mine (lower limit being £500) Obviously not all companies are the same

    Original Poster

    thanks for all your input, i feel i may hold on to it for the time being

    PaulTheYid

    isn't 10% the upper limit? I know that is the case for mine (lower limit … isn't 10% the upper limit? I know that is the case for mine (lower limit being £500) Obviously not all companies are the same



    I think so. In my case it is supposed to be 5%, so one year I paid off that amount and it knocked off years from the mortgage. In the case of the OP, it could amount to, say, 1% or so of his total sum which theoretically could knock 3 months off a 300 month term. That could well be £3000 saving or more? Well worth looking at.


    SP

    if you put that down, would reduce your monthly payment. ring up and ask.

    sc57

    if you put that down, would reduce your monthly payment. ring up and ask.



    ​best to keep payments as normal. its the term you want to reduce

    Depends what type of mortgage you have. If you have a flexible account then taking the money off your mortgage total might be the best thing because if you need it you can always take it back. Take it from me seeing nothing coming of you mortgage each year can be soul destroying when things are a bit tougher, I've lived through 15% interest rates.

    Anyway the closer you get to paying it off the better for your old age.

    If it's excess money that won't be spent on anything, then overpayment may be a good option
    you'll get naff all saving in a bank etc. other investments involved risk
    at the end of your term (assuming you may remortgage in 2 years), you'll be able to get that extra money out, but in the meantime, it's saved you 2.24% (or whatever) on that amount rather than paying you 0.1% pre tax

    if it's the only £1500 you have going spare, keep some! xmas coming up, black friday etc - certain essential and certain indulgent expenses will be on the horizon very soon!
    i wasn't much of a saver so used to consult my list of unnecessary purchases when I had excess money at the end of the month and tick some off the list. now i've been investing, bought a ready made business, set one of my own up and various other things that will pay back
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