Money Saving Expert, has revealed whether he thinks mortgage holders are better off overpaying every month or saving up a lump sum and paying down their mortgage in one go.
Martin Lewis, Money Saving Expert, held a Facebook Live answering any financial questions his followers wanted answering.
One asked: “Is it better paying a lump sum towards my mortgage or an overpayment every month?”
Martin advised: “It’s much of a muchness, if I’m really honest with you.
“If you’ve got a lump sum, and you can make sure it clears your capital as soon as you’ve paid in – which is should do in most cases if you request it – it clears your debt instantly.
So long as both count towards reducing the capital that you owe, that’s better
“Overpaying each month gets you in the habit. So I’d balance this about you, which is easier for you to do?
“So long as both count towards reducing the capital that you owe, that’s better.”
Mortgages are a subject Martin speaks about often, and last month he advised how to get the best mortgage rate.
Speaking on BBC Radio 5 Live with Adrian Chiles, Martin answered a question from a caller on the best mortgage to get as they looked ahead to their mortgage renewal.
David asked: “I bought a house worth £140,000, and put £20,000 down. We are now coming up to our mortgage renewal, but should I get a fixed rate or tracker?”
Martin responded: “I understand why you are questioning it, as the worry is if you go for a fixed it could end up it could have been cheaper if you had gone for a tracker.
“One of the things we need to understand in finance is separating a bad outcome and a bad decision.
“If you are saying to me ‘I’m thinking about fixing, and what is important to me is the security of knowing what I will pay so that I know I can afford it’, that is a good decision, even if with hindsight, in the end it would have been cheaper to go for a variable rate.”
Martin Lewis has spoken about mortgages a lot in the past, including the best one to get
Martin has also spoken about the property market in general, and his thoughts on the Help to Buy scheme.
Appearing on the BBC Daily Politics Show, Martin was asked by host Jo Coburn whether the extra £10billion the government have promised to help first time buyers onto the property ladder was taxpayers money well spent.
He responded: “I always worry about this one, first of all, I have concerns with encouraging people who can only raise a five per cent deposit to buy a house.
“Yes the scheme itself is quite good, you have to use it on a new build property remember, not on any property out there, but I’ve always worried about the government pushing people who’ve only been able to save a limited deposit to effectively stretch their finances to buy a property.”