<prompt> Human: Since taking out my mortgage 3 years ago my salary has increased by 16,000. Somebody recently recommended overpaying on my monthly mortgage repayments using a portion of my increased income. My mortgage company allows me to overpay by 10 of my final balance annually. Does anybody have any experience of overpaying? Is it worth it or should I invest in a savings account instead?  <response>: That depends on two things:Do you intend to live in the house permanently, or move up? If you intend to sell in the foreseeable future, there is little point in prepaying the mortgage. Youll knock the principal due down by a modest increment in the next few years, but it wont have much material impact on your net sale proceeds. And in the meantime youre tying up more cash flow in your house that you could be using to save or invest elsewhere. If you want to stay in there forever, by all means pursue an aggressive paydown strategy, provided its worth it to you. Which brings us to...What is your mortgage interest rate? If you financed recently and took out a 3 or 2.5 mortgage, prepaying will save you much less than if youre at 5 or 6. I hold a 3.5 mortgage and intend to stay in my property for a long time 20 years at least, but I feel I have very little incentive to prepay because Im renting the money cheaply and I can do more profitable things with my cash elsewhere. 