Cost of living crisis/kWh Measuring Contest

Aye, it can definitely work nicely for some. I've gone down the savings path myself even though it might not necessarily be the best option vs my mortgage. I can just pay off a chunk of the mortgage at the end of the saving plan's 12 months and still have access to the money before then if I need it.

I was always under the impression that over paying was usually the better option, especially early on in a mortgage. Mortgage repayments are mostly paying off the interest in the early stages, with a smaller percentage of the payment paying down the debt. So by overpaying you're wiping out x number of years interest on that capital you borrowed but have now paid back early.

I think if you're nearing the end of your mortgage then your repayments are going to be mostly paying off the capital, so it might well make more sense to stick that overpayment cash into a savings account.

I've always over paid on mine, but that's mainly to help reduce the term, and I knew that if I stuck it in some kind of savings account it would eventually just become amalgamated into general savings rather than being specifically for paying off the mortgage.

I don't think there's any right answer really. Personally I think the extra security from overpaying outweighs the few extra pounds I might have got from saving it but that's just me.

I think it's that if you got £100 at the start of the year, you might have two options:
- Pay £100 off your mortgage, which let's assume is fixed at 2%
- Pay £100 into a savings account, which lets assume is now at 5%.

Paying £100 off the mortgage means you pay £2 less interest over the year, so at the end of the year your mortgage is £102 lower
Saving £100 means you earn £5 over the year, so at the end of the year your savings are £105.

So the net benefit from saving versus overpaying is £3.

I think.

Of course, the benefit of overpaying is that you're less likely to "accidentally" spend your savings on random tat, speaking from experience...

Ah yes, that's true. You get some savings tax free, but that varies by income. You can also use an ISA to avoid that, but you might not get the best rates from them.

I've not looked at overpayment on my fixed rate, but thought it was 10% over the year, regardless of how that was achieved. Might be wrong though.

Good to see a lot of people on here have money to get through this (not being sarcastic).
It’s like a ticking time bomb for us. Just hoping we get an interest only deal ☹️

E.On dropping the direct debit at long last, down to 280 per month from august

I don't think anyone is going to be fixing for 5 years for quite some time to come.

I did consider for a brief moment 10 year fix about 4 years ago but I thought 3% was too high. Lolz 😰

Same boat as everyone else.

Our fixed rate of 1.19% comes to an end this time next year. Going to get properly fucking rogered.

They offered me 10 years at 2.5%'ish last time we renewed about 3-4 years ago and I just laughed maniacally and only had eyes for the 1% deals. Dickhead.

Halifax offered me a chance to lock in a fixed rate mortgage 6 months early; so at the mo I'm at the nice monthy and then onto the 4.7% 2 year from December. God knows what it'll be in a couple of years, but I'll have about 10 years left on the mortgage so there's that at least.

I'm more fed up with the service charges (heyoo) which has doubled. The cover letter kindly informed us they only put it up 8% this year when it should've been 11. When you look at the details 1/3 of the bill is management fees. At some point it'll come under the spotlight, but when people are making easy money it's funny how that slides.

The expectation that you need to eventually pay the cpatial off is also putting costs up more than they need to. Sure it's nice to be mortgage free, but in reality most people eventually either downsize or take equity release. As long as you have equity enough to cover them, that's fine. Fuck it, 100 year interest only mortgages. Why not?

From what I can tell, the only house price drops are the ones that were stupidly high in the first place. Round my way there's nothing on the market.

There's a chunk of flats in an old mill that aren't shifting. Probably because the vendors want £110k for them, when they have a £270 pcm service charge and £1000 a year ground rent.

Sorta. Except:

1. In the actual rental market rents almost always go up, in line with inflation/wages/property prices.

2. In an interest only repayment, none of those apply. It only goes up with interest rates, and they can go down as well. 10+ years in it's going to be way cheaper than renting which is where the opportunity cost/benefit is.

3. Security of tenure. You're not going to evict yourself. You can redecorate, have pets.

4. Over 20 or 30 years there will be equity due to rises in property values, probably. Historically even during market crashes they have more than recovered in that time frame. That is your money, not the banks.