Every day, it seems like the cost of living is making headlines, putting a strain on household budgets, especially for homeowners. If you’re feeling the squeeze or anticipating a ‘payment shock’ at your next remortgage, you might be wondering about the benefits of making mortgage overpayments.
So, why consider making those extra payments?
1. Mortgage-free Sooner: Whether it’s a one-off lump sum or regular overpayments, paying more on your mortgage could mean waving goodbye to that balance much sooner.
2. Reduce Interest Payments: Overpaying on your mortgage could be a smarter move than stashing cash in a savings account. You might save more on interest payments than you’d earn in a typical savings account.
3. Access to Better Rates: Lowering your loan-to-value ratio through overpayments could unlock better interest rates when it’s time to remortgage.
But are there any drawbacks?
Overpaying isn’t a one-size-fits-all solution. It could eat into your emergency savings or trigger penalty fees like an Early Repayment Charge (ERC) from some lenders.
Before diving in, ensure you’re financially ready. Make sure you have an emergency fund in place and no pressing debts demanding attention.
For tailored advice, chat with our specialist from Westfield Wills. We’ll help you navigate your mortgage options, including the ins and outs of overpayments.
Remember, your home could be at risk if you fail to keep up with mortgage repayments. Let’s make sure you’re on the right financial path.
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