Using savings to reduce your mortgage
Although having a little savings in your account is good to have as a nest egg in case the worst happens, you need to make sure you’re getting the best from your money.
At the moment with interest rates so low, those with variable rate mortgages are finding it advantageous, however, for those with savings this is a nightmare scenario as savings that used to earn a reasonable income are earning next to nothing at the moment.
The cheapest mortgages are available to those with the most equity in their property so consider using some of your savings to top up your mortgage. If your lender will let you make overpayments, then that could be a good opportunity. In effect, if you add your savings to your mortgage then your savings will be saving you more money than the money could earn in your savings account.
Within CeMAP training courses, delegates learn how money is paid against a mortgage and different consideration factors, such as when the interest in applied. If you are unsure, speak to your mortgage advisor or financial advisor.
Posted on February 16, 2009
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