Britannia overpayment

hwalkerh

We made a overpayment on our Britannia mortgage which we asked to be taken off the term rather then the monthly payment. I am confused by the letter received from Britannia.

First part states balance has reduced and monthly payments recalculated from £450 to £425, then states as requested payment is fixed at £450 so mortgage will be repaid ahead of schedule. (i get this part i think)

Then... "However you will need to contact us should we need to amend in line with changes in your basis subscription. it is also important to note that early redemption will result in a discharge fee of £125 and possibly early repayment charge." (I know there is no ERC as we can pay 10% with no charge)


Then... "In order for us to manually amend the term of your mortgage in line with your monthly payment we will need signed authority instructing us to do so. An administration fee of £50 is also applicable. By doing this your mortgage will run its full course and you will not incur any charges up on redemption"

I am not sure I understand what it is saying. With our previous lender they just adjusted the term. Is this saying they charge £50 to adjust the term or if we don't then £125 at the end of the mortgage?

Also if we don't adjust the term then next year we will be overpaying £25 per month already before any more overpayment that we would want to take. So that would be £300 already overpaid, and will be more each year over the 5 year term.

Thrugelmir

hwalkerh wrote: »

Then... "In order for us to manually amend the term of your mortgage in line with your monthly payment we will need signed authority instructing us to do so. An administration fee of £50 is also applicable. By doing this your mortgage will run its full course and you will not incur any charges up on redemption"

I am not sure I understand what it is saying. With our previous lender they just adjusted the term. Is this saying they charge £50 to adjust the term ?

Yes, as that's what you are doing.

Shortening the term is a change in contractual terms. Hence the fee.

hwalkerh

But if i leave it then in theory we will still pay it off early if we are keeping the monthly payments that we are on now?

Do most people make overpayments in a lump sum or a little bit each month?

BeauBelle

I make monthly overpayments on our Britannia mortgage as that is the only method allowed in our terms.