Debt · 11 recordsOverpay the mortgage

Overpaying feels obviously right and sometimes is not — early repayment charges, a low fixed rate, or an empty emergency fund can all make it the wrong call. So the sums come first, and only then the standing overpayment.

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Goal

Overpay, or deliberately decide not to Month 3

Either outcome is fine. Drifting is not.

Check the arithmetic Week 5

Overpaying is not always the best use of the money.

  • Find the rate, and what savings would earn insteadDo firstDay 7
  • Find the early repayment charge and the annual allowanceDo firstWeek 2
  • Check the emergency fund exists firstDo firstWeek 3

Set it up Month 3

Standing, and in the form I chose rather than the default.

  • Decide: shorter term or lower payment, and write down whyDo firstWeek 6
  • Set up the standing overpaymentMonth 2
  • Review it when the fixed rate endsMonth 3

Routines

  • Check the balance fallingweekly
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Three checks before overpaying

A rate below what savings earn, an early repayment charge, or no emergency fund — any of the three and the money is better elsewhere.\n\nMost fixed deals allow a percentage of the balance each year and charge above it. Exceeding that quietly undoes the saving you were making.

Questions

Overpay the mortgage, answered.

No. If the rate is below what savings earn, if there is an early repayment charge, or if there is no emergency fund yet, the money is better elsewhere. Checking those three is the first project here rather than an assumption.
Most fixed deals allow a percentage of the balance each year and charge above it. The number is in your mortgage offer, and finding it is a dated task here because exceeding it quietly undoes the saving you were making.
Reducing the term saves more interest; reducing the payment gives more room if income falls. The plan asks you to choose deliberately and write down why, since the default the lender applies is not always the one you would pick.
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