Should I overpay on my mortgage?
If you have any spare funds, should you consider overpaying your mortgage? With interest rates higher and savings rates elevated, what’s the right thing to do – overpay or save?
One of the deciding factors will depend on your current mortgage rate. It may make sense to overpay if your mortgage rate is similar, or higher than your savings rate, depending on your individual circumstances.
By overpaying, borrowers reduce their loan balance and the monthly repayments reduce to reflect this. Or if you choose to keep the monthly payments the same, you can reduce the mortgage term. The total amount of interest paid over its course will be lower by reducing your mortgage balance.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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