With most mortgage products Interest is calculated on a daily basis so you will start to feel the benefit of your overpayments the very next month!As well as saving you time & money those overpayments may allow you to break into a new Loan to Value % (LTV%) threshold when it comes time to refinance. As your LTV% reduces (usually in 5% bandings) you can access better products at lower rates of interest…. This could lead to even greater savings as you can secure the finance you require at a lower % Overpay or save? Providing you have sufficient cash to call on in the event of a financial emergency it is worthwhile checking the interest rate you receive on your savings. Most current accounts are paying close to 0% so it may be better to use those savings to avoid paying unnecessary interest on your mortgage. It is important to remember that most mortgage products will not allow you pull cash back out at a later stage so only make overpayments when it’s truly affordable. A mortgage is a necessary evil but there is little point in keeping it around longer than you need to… Small overpayments will save you a lot of time and money in the long run.
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