Jonny69-
Wouldn’t you achieve slightly better results by overpaying each month and using the surplus (lols, who has surplus money?!), plus the monthly overpayments to reduce term at remortgage time. The capital is paid off quicker so you pay less interest.
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People on here keep telling me my logic is flawed, but it seems like it’s one of the safest ways to ‘grow’ your money, by not ‘spending’ it on long-term interest.
It's a bit flawed.
If you've got the money and you're earmarking it to pay a lump sum later then you may as well overpay as you go. That way you're reducing the interest throughout the term rather than just in chunks every 2/3/5 years.
This assumes you're allowed some overpayments. Most do allow some.If the mortgage is 1.8% then any way of saving that lump sum and earning more than 1.8% (riskier certainly, but historically not too tough to find) would make you more money than you're spending on the extra interest, so even though you'd spend lots on long term interest, you'd earn that plus some more on the investments.
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Dramatic_Hammer
duncs
Yeah the limit we can over pay in a year is 10% without a fee. How does paying a big chunk off work when we re-mortgage? Do we just transfer the debt to another/same bank minus the extra money we can now pay in cash?