When you stop overpaying ?

Welshlassie

I can see where you are coming from.
Normally you wouldn't need to officially reduce your term, but becasue less is owed on the mortgage it would automatically finish before the anticipated mortgage end date. It is rare for people to stay with the same mortgage lender for the whole of the life of the mortgage.
Defiantely check the Key facts document this should help you determine if you have a case for complaining about how they have used the OPs

charliee_3

ok, i am probably going to sound really stupid, but if your payments have gone down why dont you overpay to make them the amount you feel they should be/can afford.. i wouldnt think you would still be with the same company at the end of the term anyway will you so what difference does it make??

kingrollo

charliee wrote: »

ok, i am probably going to sound really stupid, but if your payments have gone down why dont you overpay to make them the amount you feel they should be/can afford.. i wouldnt think you would still be with the same company at the end of the term anyway will you so what difference does it make??

The difference is I have no idea when my mortgage will end - other than the original term !

TotallyBroke

Do your overpayments get taken off your mortgage at the time you pay them or are they held together and then paid off in one go? Can you take back your overpayments at anytime.
I'm just wondering because that could be where the confusion may be coming from. They may mean that : "1.They originally say overpayments will not be used to reduce subsequent payments - implying that the term will reduce." the payment will not change on a month to month basis but when your yearly statement comes through it will show you your new mortgage amount and new monthly payment.

kingrollo

TotallyBroke wrote: »

Do your overpayments get taken off your mortgage at the time you pay them or are they held together and then paid off in one go? Can you take back your overpayments at anytime.
I'm just wondering because that could be where the confusion may be coming from. They may mean that : "1.They originally say overpayments will not be used to reduce subsequent payments - implying that the term will reduce." the payment will not change on a month to month basis but when your yearly statement comes through it will show you your new mortgage amount and new monthly payment.

Well I had a mortgage statement in Jan - and the term wasn't reduced - and there was no mention of my payments being reduced - although effectively they have reduced.

foreversummer

Look, it really doesn't matter what the actual term of the mortgage is. Just make the payment you need to make to reduce the term by however many years you want to reduce it by. You can work this figure out on any overpayment calculator.

That is exactly what I am doing. My term is 19 years but I am making sufficient overpayments to reduce it to 10 years.

Now that they've reduced your contractual payment, just make an overpayment to make up the difference.

Above all, don't be disheartened. Every overpayment counts!

Foreversummer

Lynn11

We are roughly the same. I pay by cheque any overpayment that I can and it is taken off the capital, so paying less interest on this due to the overpayment but our term of the mortgage still remains at 20yrs, even though in theory I think that I have paid off 5yrs. When we come of out this fixed deal end May, if we consider going into another fixed deal then I will be finding out if we can reduce the term of our mortgage by 3yrs and see what the monthly payment is. Our original monthly payment has remained the same over the 3yr fixed deal even though we have made nearly £9k in overpayment.

Baz_2

Just tell them to pay what you used to pay.

i.e if you were paying £500pm and then overpaid a bit so that they then reduced this to £450. Just tell them to keep your payments at £500. So according to them you are overpaying still but this time by £50 and then never stop that. When you overpay again just remember when they stop to reduced it back down to £500pm again.

Jobs a goodun and you will be back on track and effectively have reduced the term by the amount you overpaid.

blueberrypie

kingrollo wrote: »

Well I had a mortgage statement in Jan - and the term wasn't reduced - and there was no mention of my payments being reduced - although effectively they have reduced.

I think maybe there's been a bit of a misunderstanding. By overpaying, you *will* finish paying off your mortgage earlier - but you still have an agreement with your lender to pay it off over a certain length of time (the term). As others have said, if your lender automatically reduces the regular payment after overpayments, you just need to keep paying the extra (bearing in mind any limits/fees on overpayments, of course). That might seem like a bit of extra hassle, but as you've said, it leaves you more flexibility. If you were to officially "reduce the term", your regular payments would be recalculated and would increase, so in a way it's better to "not reduce the term" - the only time reducing the term like that would actually benefit you would be if you wanted to overpay by more than your mortgage agreement allowed.

It might help to think of the term as the period of time up to the date you originally agreed to pay the mortgage off by, rather than the date it actually gets paid off if you pay more. The first date is only relevant if you a) stay with the same lender until then and b) never make any overpayments.

But anyway, although your term is the same as it was, it doesn't mean your mortgage won't be paid sooner than that. You should be able to work out how much sooner you'll be done by using one of the mortgage calculators.

shedavp

Im glad Ive found this thread. Im really annoyed as Ive just realised that my monthly overpayments with C & G have not reduced my term. I have been given a few options though, I can reduce the term by paying a lump sum which incurs a £10 admin fee each time I pay, or officially reduce the term which will cost £32.00, but then I lose flexibility if the interest rate changes.
Thanks for the info - deep breath and keep paying after all it's going the right way !!