Halifax Mortgage advise overpayments

Mortgagehelp_3

Scanned through loads of threads on this forum, all very useful.

I have a few questions regarding my current 3yr fixed rate mortgage with Halifax (5.62% over 23yrs). I am 5 months into my 3 year fixed.

Please can someone explain how overpayments work, I can only overpay by 10% a year, is that 12 calendar months after I make the first 10% overpayments or the birth of the mortgage date?

Does the overpayment come directly off the amount borrowed? or the interest as wll? I know mortgages work on a pyramid scheme?

Also I have a large cash sum (70k plus) not making any interest, considering pumping it into the mortgage, to do this means either trickling it in yearly or paying the penalty 3%. Any advise, if I breakdown the penalty over the next 2.5 years the cost would be even as I would drop to a lower rate product.

Last question, how does reducing the term work?

I would call halifax but had bad experiences with there call centre staff.

Thanks

S

beecher

If I make an overpayment I phone up the call centre and tell them I'm going to do it. They put a tag on my account as I was told that often cashiers forget to mark it as a capital repayment and it can sit in the account. Was told by someone else this was rubbish though.... I find that the counter staff and call centre staff often say very different things, but I tend to trust the call centre staff more.

Capital repayments comes directly off the capital. You can either reduce your payments or reduce the term but I think it costs £10 to reduce the term. They would just keep your payments the same and reduce the term by the appropriate length of time.

Don't know about how when the 'new' 10% overpayment is allowed as I've never repaid that much.

As for paying the 3% penalty, someone else will work out the maths but surely you can find somewhere for your cash which does make you interest? You could go to the Savings forum to find out.