Northern Rock Overpayments

davidndawn

Never imagined it would be that much of a saving

First thing tomorrow i shall be taking ur advice and calling NR

My calcs work out that shifting lenders will cost in excess of £6.5k with solicitors fees etc as you suggest

The One account on the same basis and figures i gave you reduced by almost 11 yrs

So i theory we would quite possibly lose by shifting and have the headache to go through of shifting.

Once again - many thanks and i will post the reply from NR tomorrow

dimbo61

When you contact NR ask about making the £30k lump sum overpayment and you could also ask about reducing the term so that it finishes at the same time as you fixed rate deal ends !
It would only increase your monthly payment by a few pounds and you would be mortgage free in 11 years and not have any more fees to pay
Just an idea!

dimbo61

Your mortgage payment may well go down with the £30k overpayment so reduce the term and fill your ISA allowance and regular savers.

VIGILANT22

dimbo61 wrote: »

Your mortgage payment may well go down with the £30k overpayment so reduce the term and fill your ISA allowance and regular savers.

It does one or the other, reduces term or reduces payment....the OP''s aim is to reduce term keeping mortgage payments the same........To achieve your mortgage ending at the same time as your fixed rate ends....all you have to do is overpay by approx 40pm...this over 11 years equates to the sum you would have paid in erc's........

getmore4less

Three things.

1. It is not clear what any ERC will be,

What happens if you overpay under clause 1 at the end of the months to avoid clause 2

Then redeam the lower amount does that reduce the ERC or is there a ERC on redemption(£5k?) seperate from those two clauses?


2. Why the One Account, FD offset is a better deal at the moment.

3. One key feature of offset is acces to the funds, if you need/want this feature NR may not give you the money back if you overpay.

getmore4less

davidndawn wrote: »

Initial Fixed Term: 15 years
Started: Sept 06
Interest Rate: 5.19%


As of 31st Jan 2010
Term = 19yrs 8mnths
Current Outstanding mortgage = £97,818
Monthly payment = £654
Lum Sum Available = £30,000

ERC = £5,250
Discharge of Mortgage Fee = £250

Many Thanks

£67818 @ 5.15 to be paid off by sept 2021(end of 15y fix) £651pm 139months

+ costs you say £6500,

£74318 @ 2.89% (FD no fee offset) £651 134months(april 2011) 5 months early

Break even month is Sept 2015 £40k

£75318 @ 2.39% (FD £1k fee) £651 132 months(feb 2011) 7 months early

break even month is March 2015 £43k

So on the offset trackers you need around 5 years to break even

As long as interest rates stay low.
I think this is a bit on the risky side for the total saving of around £4700 at end of term,

If you can get the ERC down this will become a lot more attractve.

davidndawn

Contacted NR. They are calling back tomorrow but seemed happy that it was possible to reduce the term all dependent on the overpayment amount.

Thanks for the advice - ALL. You may very well have saved me a headache and quite possibly a considerable amount of money should interest rates start to creep up.

Watch this space and i will post details after they get back to me...