Taking time out from the usual to enjoy a cup of that which refreshes but does not inebriate whilst scanning the MSM's on-line sites (those that aren't paywalled, any way) my eye was drawn to Does overpaying a mortgage beat saving? which turned out to be one of those "a reader writes and our expert answers" articles.
My suspicion that the expert was going to say "right now, probably yes given the piss-poor rates of interest available via most savings vehicles unless you have a considerable amount of free cash which you are willing to tie up and leave untouched for quite a long time" was borne out. And of course, readers are advised to apply their free cash to eradicating higher interest bearing debts like credit cards and loans first.
The line that brought me up with a start though was "As to which of your mortgages you should start overpaying first..."
Multiple mortgages and still worrying about "what best to do with our free cash each month"? Yes, in my haste I had skipped reading the actual question: "My wife and I have two mortgages with our lender and we reckon we can afford to overpay them by up to £500 a month. The larger mortgage is on a fixed rate of 5%; the smaller one, a top up to buy our second home, has a much lower tracker rate. Is it a good idea to overpay rather than saving the £500 a month? If it is, which mortgage is financially best to overpay first?"
Once I dipt into the future
10 hours ago
2 comments:
Yeah. The correct answer was obviously to take a third mortgage with repayments of £1000 a month, blow the cash on a world cruise, get behind with mortgage payments and ask the government for help.
How could the Guardian have missed that?
AC, did the experts not mention that as an option? Shame on them.
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