That is not true at all.
Ah there's far worse off than me. Thankfully I've always been frugal and a saver so I have good buffers in place incase anything like that happened.
You'll have a massive pension which is taxed at high rates on withdrawal.
) although unsure if you've done the savings at 2% by mistake? Either way if you're talking ~£150 difference per year I'm not sure that warrants the hassle of maintaining an account, doing the admin etc. I'd rather just overpay and forget about it.
@jaybee that seems to be more the differences that I saw per year (those numbers are not ours, mind
The comparisons of over 25 year period are just nonsense because you can't possibly take into account the mortgage rate changes and savings interest rate changes.
Probably because of rate uncertainty, the quirks of ultra low mortgage rates and higher savings rates will quickly fade. I do find it amusing people will berate banks etc but when they have a chance to give them less money its too much hassle.
@jaybee that seems to be more the differences that I saw per year (those numbers are not ours, mind
The comparisons of over 25 year period are just nonsense because you can't possibly take into account the mortgage rate changes and savings interest rate changes.
It's applicable, but it's not a real world example because nobody has the same mortgage rates and interest rates over that period. Over the last 25 years the BOE rates have gone from 6% in 1999, all the way down to 0.5% in 2009, and back up to 5%-odd whatever they are now. How can you do the sums on what you don't know for the next 24 years of your mortgage?
Besides, if you want to calculate it over the whole period you need to take into account your max overpayment amount as previously mentioned which is generally 10% of your loan. So you have to "reset" your sums every year as you take out that amount to overpay. Some people won't actually be saving more than they could feasibly overpay anyway, in which case you may as well be doing your sums year on year basis. In which case as above if you're talking about £100-200 difference per year it might not be worth the hassle.But then like I say above it's doing your max overpayment every year, changing savings accounts every year to maximise the rates available, moving that money. Then doing these sums every time your rates change on the mortgage or savings. Yes it's not that much admin in the grand scheme of things but it's tedious nonetheless.
You have to also take into account that you can take 25% of pension pot tax free when doing sums...it's all tricky and a mix is good but that 40% back plus any NI your company gives back is a big win for pension...as at draw down you are most likely only going to be in 20% tax bracket...
It's applicable, but it's not a real world example because nobody has the same mortgage rates and interest rates over that period. Over the last 25 years the BOE rates have gone from 6% in 1999, all the way down to 0.5% in 2009, and back up to 5%-odd whatever they are now. How can you do the sums on what you don't know for the next 24 years of your mortgage?
But then like I say above it's doing your max overpayment every year, changing savings accounts every year to maximise the rates available, moving that money. Then doing these sums every time your rates change on the mortgage or savings. Yes it's not that much admin in the grand scheme of things but it's tedious nonetheless.
Each to their own. We're only going to go round in circles on this. We've done the sums, double, triple checked them separately and are pretty comfortable that the difference gained is not worth the aggro in our particular circumstances. We spent years and years and years admin'ing savings accounts, moving around for the best rates etc. It's a pleasure to not have to do that for once, and simply start attacking this big 'ol mortgage we have instead and watch it go down.
Dude if the savings rate is HIGHER than your interest rate, the sums are done/finished/complete.
didn't know it was even a thing haha
