⚙ In one of our earlier posts, we predicted the mortgage rates going up to 4.25% , which was then subsequently announced on the 23rd March 2023. Now the question of the moment is. is it worth over-paying your mortgage?
In a world where price hikes have become commonplace is it worth considering overpaying your monthly mortgage? Around £236.8 billion worth of old mortgage deals will finish this year according to CACI. Santander has mentioned that their customers will pay an average of £260 more per month after they re-mortgage.
⚙ Overpaying is really down to individual circumstances; you could be saving tens of thousands over the years by reducing your mortgage term down from 25 years to 10-15 years depending on how much you over pay. Ensure you always pay within the maximum overpayment terms allowed by your lender, to avoid any ERC (Early Repayment Charges). Overpaying your mortgage might be beneficial before switching deals with your current lender which might be at a lower rate if negotiated pre-2021, you need to weigh your options and ensure your mortgage interest payments are higher than the interest you could be making on savings accounts , that offer higher savings rates due to increased interest rates. Check out our previous posts about the best saving options available, accounts such as ATOM and Marcus are viable options! You could lock a rate of up to 5% fixed rate savings with these banks for longer agreed terms.
For more detailed information about how to properly plan for increasing mortgage rates and maximizing savings, feel free to drop by Nurbhai and Co and have a face-to-face conversation about next steps. If you are looking to secure a new mortgage with a different lender, you will need to ensure your paperwork is in place, we can help with this and much more!
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