Mars Capital - change of terms and conditions - ADVICE PLEASE!

JAnimalR

We had a fixed rate interest only mortgage with Mortgages plc (due to poor credit rating and self employment). We were looking forward to coming out of our very high fixed rate last November, and planned on conferting back to a repayment mortgage and overpaying to help bring our mortgage balance down a bit.
However, in October 2010, Mortgages plc sold our mortgage (and several other 1000's no doubt) to Mars Capital, who made contact and sent us notification of the change.
At the end of November, we were notified of our new (vastly reduced!) mortgage payment, and confirmation that we could convert back to repayment, which was great. I've just started maternity leave, and although we are conscious of our money for the next 6 months or so, while I'm earning less, we could still have afforded to overpay a couple of hundred pounds each month.
All was going Ok, but today we've received a letter saying that "Mars Capitals' approach is different from our previous lender" and "our approach is to recalculate the payment each month the the current interest charging balance" and "therefore each monthy payment is calculated based on the balance outstanding at the end of the previous month".
I am a tad confused, and probably suffering from pregnancy brain (!), but this clearly means that our payment will change every month - does it mean that it should reduce marginally each month, as the balance will surely reduce each month and reflect the payments accordingly?
Also, would now be a good time for us to start and shop around for a new fixed rate again, or shall we just try and milk the variable rate for a while longer. We've still got a lot of play from what our old mortgage payments were to what they currently are now, and want to make the most of it ... We know we'll still be penalised for our previous credit history (almost 5 years ago, so not much longer now!), and self employment (my hubby is now employed, but I'm self employed).
Any advice will be very gratefully received!!!
Thanks!

Thrugelmir

Although the calculated monthly repayments may differ (days in month for example). Standard practice would be to revise them just once a year unless the actual rate of interest changes.

Continue to overpay as you have done. Switching to a repayment when the time is right will also pay dividends.

As reducing the capital balance on your mortgage , over time, will enable you to access better rates of interest. As your LTV improves. Though this is subject to the way the property market moves, as we head for a period of uncertainty in my view.

JAnimalR

Thanks for your thoughts ...
We have swtiched back to repayment, and will continue to try and overpay where we can ... and sit fingers crossed and see how things move! Uncertain and slightly daunting times ahead ...