Advice needed about overpayments.

wannabemortgagefreee

Hiya,
I am really hoping not to sound thick here, I currently have a mortgage with the Halifax on a 5 yr fixed rate ;-( I am just over 2 years into the mortgage, and I am trying very hard to pay it off as fast as possible.
I am apparently able to overpay by 10% per annum according to the booklet! but does this mean 10% of the original amount of £65500 or 10% of the current mortgage of £61k???????? They do not seem to make overpaying very clear in their terms and conditions, as I am sure they do not like overpaying as it costs them in the interest gained by not overpaying.

I am on a mission with my mortgage to reduce it as much as possible, at the moment I intend on overpaying £2500 before 2011 and nearly half way there ;-) but now begining to worry incase I get charged an early repayment charge depending on how it all works!! Once achieved I plan on overpaying £3-4k by June 2011 :eek:. In July 2011 I will enter my 3rd year of the fixed term.

CathT

Hi,

Might be worth giving them a ring. By the sounds of it you'd be ok at the moment as paying less than £6000 off mortgage per year but not sure how that would impact as your balance reduces.

Good luck.

narnie1

Hi

Definately need to phone them. My mortgage runs from calendar year (not from the date I took it out) and I can only over paid 10% of what I started this calendar year with not the amount that the mortgage started out as.

wannabemortgagefreee

Thank you for your advice, managed to work out from further reading very small print that the 12 month is a rolling period, so I can only overpay 10% over 12 months at anytime so need to keep tabs on it, and I shall call them tomorrow to find out whether it is on the original amount or the current amount.
Thanks

NeverEnough

I think it means 10% of the amount in a 12 month period - it may have been £6500 when the mortgage was £65000, but will reduce due to regular repayments and overpayments in each 12 month period - there are hefty penalties if you repay more than the 10% allowed in the fixed period, so take care to clarify it carefully with them first and write down what you hope to OP in each period so you don't inadvertantly go over that 10%......oh, and good luck in the MFW quest!!!:)