I currently have a Interest Only Tracker Mortgage with Halifax to the value of £123,000. At the moment we are not putting extra money aside as we are currently renovating the house. As the interest rates come down I would like to put the little bit of money saved to good use. Should I open up a savings account to actually pay for the house, or should I overpay on my mortgage? I am able to overpay by 10% a year according to my contract without incurring fees. What do you suggest?

Hi...in todays climate where borrowing costs more than you can make on a savings account than the advice is pay off your mortgage whenever possible. Don't forget that if you maintain the current level of overpaying as the capital reduces, the benefits will increase considerably.

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Regards

Ian