In a muddle

eco_farmer

hi there,
have been an avid lurker on this site for sometime now and have learnt loads and have put much of what i have learnt into practice. So now we find ourselfs in the brilliant position of being able to overpay our mortgage:j .Our only problem is that our mortgage provider charges £55 per extra transaction. So should we save up the over payments and pay in one lump sum or pay our bugeted lump sum for the year up front from our O/D and pay back the overdraft?OR in a third option should we shorten the term of the loan?

currently our loan has 31yrs left to run and the interest rate is 2% over base.Our home has a section 106 agreement on it so changing our loan provider would be v difficult.Any comments or suggestions would be gratfully recieved!

many thanks in advance
eco

crazyhazy

I would save the money in a high interest account or cash isa and pay it off once a year or when you have reached a set amount. I wouldn't use an overdraft to pay it up front due to the overdraft charges and what would happen if your circumstances changed and you couldn't afford the extra each month. Which lender is your mortgage with, £55 seems a lot for making an overpayment.

piptom&AndyPandy

Hi
I'd also check the overpayment thing with the financial services banking code as I am not sure it's allowed.

Regards
Pip
x

newmum1

Ithink overpaying depends on the type of mortgage im with halifax and can overpay up to 10% of the balance each year, anything over you pay a fee.

name and shame your provider!

doodledo_2

Can't offer any advice but it might be worth posting this on the Mortgage Free board as well as likely to be more people with knowledge to help you with this query.

Good luck with your overpayments.