extra mortgage payments

[tricky51]

I'm on a tracker rate so my mortgage repayments have dropped recently. I was going to top up my re-payments with the saving plus a little extra, to shorten the term, total €400/month. i am a temp. local gov worker and dont know if my contract will be renewed next year(may'10). would i be better off to bank this extra payment in a regular saver? how receiptive are the banks to adjust the term in order to drop the repayments? I'm with halifax, rate 2.75%, current repayment €790/month. my wife works in local gov job and permanent.

 

[PaddyW]

Tricky, if you can get a savings account with a rate of about 4% or higher (taking DIRT off this leaves it roughly around 3.08%), then it would make more sense to save it for now. Plenty options for accounts with high enough rates (check the best buys section). Continue to save until mortgage interest rates begin to increase (hopefully never!) and then pay whatever lump sum you have directly off the capital to reduce the term of your mortgage.