Overpaying WITHOUT altering the term

nickmax1

I have a Bristol and West mortgage (2% below SVR) until October this year. The deal with overpaying is i can pay a lump sum up to 10% (but minimum £2,000) of the remaining balance (162k on a 171k mortgage). I have till the end of this month to decide to make an overpayment before the financial year ends, after which i can make another 10% overpayment, but when i spoke to B&W about it my term does not decrease, just my monthly installments. How come nobody else's does this? All overpayment calculators seem to suggest a shortening of the term!

I have about £30k in savings (my wife and I combined)

There doesnt seem to be much point to overpay if my term stays the same is there?

beecher

Mine does that too - I'm with Halifax. If I pay £10 I can change my term, but I've chosen to just do so once I get a new deal instead. When your deal comes to an end in October your mortgage will be lower and you can cut the term then. Alternatively phone up and ask if you can change the term, and if there's a fee. With your high LTV it is definitely worth overpaying as it is the only way you'll get a deal elsewhere.

Robert_Sterling_3

Nationwide lets the customer decide between short term & lower payments.

nickmax1

Just to clarify, the original loan on my flat was 171k, the value of my home is estimated at 220k.

beecher

Ah right, sorry about that. If your savings are generating more interest than you're paying, it might make more sense to wait til October and reduce your balance then. If you're staying on the SVR just check you can make unlimited overpayments. If you're remortgaging elsewhere you'll just pay off the extra before doing so.

nickmax1

My savings are in natwest e-isa at 3.51%, my mortgage with B&W is paying at 1.49% (unless they decide to pass on the recent .5% cut then it will be 0.99%)

My only worry is my LTV when it comes to October, the way things are going now i will have a LTV of roughly 75%, so hopefully the deals will be better by then.