UK Landlord Forum / Life

EDIT (wouldn't let me edit my previous post, seems to be a Javascript error in both IE and FF)

Option 3 @ 5.95%
               Fees = none
               Total Monthly payment = £495.83
               Total cost over 2years = £11899.92

Yeah, I think option 1 is the way forward, especially since you can pay the fees upfront.

There was no difference - that's the point. Presuming the interest rate on your mortgage and savings account is identical, taking your overpayments and whamming them in the savings account instead puts you in exactly the same position as you would be if you continued making overpayments.

The interesting things happen when rates vary. Typically banks like to charge you more than they give you for savings, so on that basis you are more likely to be out of pocket if you use a savings account, but it depends how closely you watch things. Given that lots of us spend 37.5 hours of every week working to make that money, you'd think we'd spent a little more time figuring out what to do with it.


V

Yeah, the difference is minimal; not much in it. The only way you'll benefit or get stung, is if rates significantly change early on during that 2 years.

Which would you go for, V?

Well you do have the insurance if you invest in a savings account that if the rates change drastically enough to make the lump sum penalty seem worthwhile you can still chuck the savings into the mortgage. I guess the other way around you don't really have that option.

At the moment I'm making overpayments. If had more equity I might look at the savings route, but only once I knew the bank could see I was a long way down the list of worthwhile candidates for foreclosure.


V