Mortgage company can not help. Can any of you help?

Newt_2

Hey All,
I really do hope that someone can advise me on what to do.

My goal is in 2 years to pay off as much of my mortgage as I can so we can move house. I approached my mortgage company and they are not willing to help. Each person I speak to tells me something different.

I have 3 pots of money which currently are all on 16.7 years.

Pot one £75,000 on .95% above base
Pot two £72,000 on .37% above base
Pot three £53,000 on 3.99% fixed for 2 years and then 1.99% above base
We pay approx £1250 a month.

I wanted to up this to £1450 a month
My thought was to attack the 0.87% as that rate will no be around to much longer and for each £ I pay more is coming of the mortgage.

Therefore I went with
.95% 16.7 years
.37% 9.6 years
3.99% 30 years

After being told this was fine to do, the mortgage company then said I could not do it. I can get round this by making over payments.

Yesterday I was told by the mortgage company I should attack the 3.99 and move the other 2 pots of money to 30 years.

I am now not sure to do so I am turning to the experts on this board. My forcast in 2 years I believe interest will be at 2.25%.

Evilm

Be careful that you do not exceed the allowed overpayments on the fixed section. fixed rates often come with penalties for overpaying too much (for example Nationwide was if you paid over £500 overpayment a month and Halifax is 10% of the mortgage in a year).

Who is your mortgage with? That might help draw out people who have dealt with these issues with that provider before.

I would, personally, leave the lower rates alone and pay in small overpayments on the 3.99% being careful of the limit before penalties are applied. We used to do this with Nationwide by walking in there with a cheque and stating to the desk clerk which section of the mortgage we wanted it applied to.

Once you are near reaching the penalty limits on the 3.99% I would then go to the .97% above base since the more you pay off the highest interest section that the less interest you are paying overall and in the future.

betmunch

Assuming you are allowed to make overpayments just over pay by £200 making sure the overpayment is taken off the rate with the highest interest at the time of making the over payment.

If you do extend the term to 30 years you will lower the monthly payment you are committed to making thus increasing the overpayment on the pot with the highest interest rate, which is good. However it also means that potentially you are in their pocket for the next 30years (if you keep to your payment of £1450 you will obviously have the mortgage paid off well before then)

I feel the bank has given you good advice - and believe me, I dont say that often!