Limit to HBOS Standard Rate Mortgage overpayments?

lobster123

Hi,

Does anyone know if HBOS have a limit on overpayments?

I have a 25 year Interest only mortgage for £32,000 with 8 years left. I am currently on the Standard Variable rate of 4.5%, having gone onto this after the Tracker ended around 2005/06.

I'd like to overpay by £750 per month as this would reduce my term to 3 years 4 months and save me £9,000 in interest.

Any advice greatly appreciated.

SmileyG_2

lobster123 wrote: »

Hi,

Does anyone know if HBOS have a limit on overpayments?

I have a 25 year Interest only mortgage for £32,000 with 8 years left. I am currently on the Standard Variable rate of 4.5%, having gone onto this after the Tracker ended around 2005/06.

I'd like to overpay by £750 per month as this would reduce my term to 3 years 4 months and save me £9,000 in interest.

Any advice greatly appreciated.

Try this on the Halifax website. You should be able to overpay at least 10% of your outstanding amount each year, but if you are on SVR, you may be able to pay more.

SmileyG
http://www.halifax.co.uk/mortgages/switchingspecialfeatures.asp#Make_overpayments_or_part_repayments

lobster123

Thanks for the reply. I had a look on the site also, but was wondering if I would be able to increase my overpayment (from the stated 10%), if I wasn't tied into any particular mortgage.

10% would work out at £266 per month. Well under my £750 budget.

determined1_2

I now your on IO, but this might help.

The rules for me (repayment fixed) are I can overpay by 10% on a rolling year. I.e. Take todays date and subract 12 months (365/366 days), multiply the capital balance outstanding by 10%, and you can make that much overpayments in the previous 12 months. I have a spreadsheet that tracks the mortgage balance, but I'm not sure how 'normal' people are to know their balance on a continuous rolling period

However, if you think your going to go over the 10% figure you can reduce your term which then ups your 'normal' monthly payment. I beleive there is a £10 fee for doing this, but the interest saved definitely outways this.

As I said, I don't know the full details for IO, but could be useful. Hope is helps.

dimbo61

If your lender will not allow you to overpay as much as you want ask them if you can reduce your term to say 5 years and therefore pay a bigger mortgage payment each month ( only do this if you can afford the higher payment EVERY MONTH !!!)

lobster123

I spoke to HBOS today and there is no limit to the amount of overpayments I can make, which is great news. No charge either!

I was told that I have 2 options:

i) Continue with my regular mortgage payments and then set up a standing order for the overpayment.
ii) Cancel my current direct debit for the mortgage and set up a standing order for a set amount, including an overpayment.

I was assured that all payments would go direct to paying off the capital.

Are there any pros and cons to either of these options? or does it make no difference?

Thanks in advance.

dimbo61

Keep your regular mortgage payment and set up a standing order for the extra each month just in case you cant afford the extra one month ( boiler breakdown, car repairs etc )
You can then increase or decrease the SO when you want !!

lobster123

dimbo61 wrote: »

Keep your regular mortgage payment and set up a standing order for the extra each month just in case you cant afford the extra one month ( boiler breakdown, car repairs etc )
You can then increase or decrease the SO when you want !!

Your're right! I hadn't thought of this. It would certainly give me more flexibility.

Cheers for putting me right

Rikki

lobster123 wrote: »

I spoke to HBOS today and there is no limit to the amount of overpayments I can make, which is great news. No charge either!

I was told that I have 2 options:

i) Continue with my regular mortgage payments and then set up a standing order for the overpayment.
ii) Cancel my current direct debit for the mortgage and set up a standing order for a set amount, including an overpayment.

I was assured that all payments would go direct to paying off the capital.

Are there any pros and cons to either of these options? or does it make no difference?

Thanks in advance.

I make my overpayments via on-line banking. I just use the bill payment system with the mortgage account details supplied by the bank.

I just pay what ever amount I want. when I want, as many times a month as I wish.

lobster123

Rikki wrote: »

I make my overpayments via on-line banking. I just use the bill payment system with the mortgage account details supplied by the bank.

I just pay what ever amount I want. when I want, as many times a month as I wish.

Rikki, I was thinking that this would be the easier option for me too. Do I have to stress that the payment is coming off the capital part of the mortgage first?

Dumyat

Rikki do you bank with HBOS because I have never managed to do this online. I tried again last night after reading your post, and it was rejected.