Letter from Halifax (Reduce payment or term)

ironman1

Hello all, just after a bit of advice. Halifax recently sent a letter to us after a recent overpayment saying because of our mortgage has an early repayment charge so they need to reduce our monthly payment or the term.

Strange as we are allowed to overpay 10% a year and we aren't even half way near that!

Anyway what is best, reducing the term or the payments? Probably an obvious answer but you lot are more clued up than me!

Sorry if I haven't given enough info for an answer, anything else you need to know please ask!


Thanks

ElusiveLucy

Halifax are not alone in doing this - I am with Nationwide and if you overpay by £500 or more in a month you can choose to reduce the term or downsize the payments. The choice will depend on whether you feel confident in your ability to make payments in the future, bearing in mind interest rates changes, job security etc. Presumably you are as you took the mortgage out in the first place, so you could consider reducing the term so you pay your mortgage off earlier....the choice really depends on your circumstances and your attitude to your mortgage. I am aiming to pay mine off as soon as possible, so chose to reduce the term.