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    • JoRo1970
    • By JoRo1970 12th Jul 17, 10:33 AM
    • 3Posts
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    JoRo1970
    HELP! Mortgage Overpayment Confusion
    • #1
    • 12th Jul 17, 10:33 AM
    HELP! Mortgage Overpayment Confusion 12th Jul 17 at 10:33 AM
    Hi, I am new to this forum so I apologise if this has been asked before. I have just rung my mortgage provider with a view to making some regular overpayments to reduce the length of my mortgage term. I was looking to pay around £100-£150 a month extra however the person on the phone told me I would have to make overpayments of a minimum £415 a time as any overpayment must be equal to my capital repayments otherwise my overpayments just won't count. I am really confused now and wondered if anyone can explain this to me as I was under the impression I could just make an affordable regular overpayment and it would reduce my term over the duration of the mortgage? Thanks in advance x
Page 1
    • zx81
    • By zx81 12th Jul 17, 10:39 AM
    • 12,569 Posts
    • 12,745 Thanks
    zx81
    • #2
    • 12th Jul 17, 10:39 AM
    • #2
    • 12th Jul 17, 10:39 AM
    You'll need to name your mortgage provider. Rules vary, but that sounds very unusual.

    I expect something has been lost in translation.
    • JoRo1970
    • By JoRo1970 12th Jul 17, 10:40 AM
    • 3 Posts
    • 0 Thanks
    JoRo1970
    • #3
    • 12th Jul 17, 10:40 AM
    • #3
    • 12th Jul 17, 10:40 AM
    Santander, it's just a 2year fixed rate mortgage.
    • Lilla D
    • By Lilla D 12th Jul 17, 2:05 PM
    • 238 Posts
    • 109 Thanks
    Lilla D
    • #4
    • 12th Jul 17, 2:05 PM
    • #4
    • 12th Jul 17, 2:05 PM
    Hi,

    Indeed rules can vary lender to lender and deal to deal. It's not that unusual (unfortunately) that some lenders insist on a minimum overpayment amount before taking it into account for reducing the next monthly payment or the term. I think it is unfair, but when I complained to my old mortgage provider, they always pushed back, but reduced the amount owed or the term nonetheless. I never took it to the ombudsman after the lender complaints, but if the lender's terms and conditions state a min overpayment amount in order to reduce the balance/the term (which mine didn't), then there's little one can do about it.

    I'd say check the small print (not in the KFI or the offer which will just say that you can make a 10% per annum overpayment without a penalty), but the separate T&C document and if there's nothing about min overpayment amount, then make a complaint to Santander and take things from there.

    Just to say, it's not automatic that an overpayment reduces the term. An overpayment can also reduce your monthly payment amount, if the term is kept the same.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • getmore4less
    • By getmore4less 12th Jul 17, 4:01 PM
    • 29,174 Posts
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    getmore4less
    • #5
    • 12th Jul 17, 4:01 PM
    • #5
    • 12th Jul 17, 4:01 PM
    With daily interest as long as the balance is reduced you get the benefit of reduced interest which is he important bit of over payments


    changing the term is only really a problem if you are overpaying into ERC territory, it is the payments that determine the real term.

    If you really want the payment reducing you should be able to ask for that at any time or you can use one of the rigger events.

    if doing regular overpayments you just adjust them yourself.
    • JoRo1970
    • By JoRo1970 14th Jul 17, 10:11 AM
    • 3 Posts
    • 0 Thanks
    JoRo1970
    • #6
    • 14th Jul 17, 10:11 AM
    • #6
    • 14th Jul 17, 10:11 AM
    Thank you for the advice. I was hoping to reduce the term not the monthly payment and it was when I informed them of this they told me about the minimum payment. I will definitely check my T&Cs - thanks again ;o)
    • Boredatwrork
    • By Boredatwrork 14th Jul 17, 10:46 AM
    • 112 Posts
    • 65 Thanks
    Boredatwrork
    • #7
    • 14th Jul 17, 10:46 AM
    • #7
    • 14th Jul 17, 10:46 AM
    Thank you for the advice. I was hoping to reduce the term not the monthly payment and it was when I informed them of this they told me about the minimum payment. I will definitely check my T&Cs - thanks again ;o)
    Hi JoRo1970,

    May I ask why you want to reduce the term, I only ask as the getmore4less, already advised in a lot of cases there isnt any need too, and in fact its better to leave it as it is when maing an overpayment.
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