Early payment of mortage

saphydog

Im just ending my first year of mortgage payments (Halifax)

Initially decided to take it over 35 yr and am currently paying off approx £100k (although at the end of all payments nearer to £180k)

This was more of a cautious thing as my job seemed insecure at the time but have found i am coping much better than i imagined and estimate a saving of £10k+ a year.

I think the max per year im allowed to over pay is £10k

Would i be penalised for making an overpayment and can anyone advise on how the overpayments work.

Im pretty clueless and this is my first ever mortgage which is fixed for another 2 years

I feel more comfortable making overpayments rather than committing to payments that i may not be able to afford later on.

Any help appreciated i would love to be mortgage free before im 50:rotfl:which leaves me 23 years

GuidoT

It is quite likely you would be charged for overpaying, but it does depend, either look at your mortgage offer or give Halifax a call to clarify (they are helpful on the phone - 08457 273 747).

If you cannot overpay or it is financially prohibitive to dp so, then put the money into a savings account and when the fixed term ends you should be able to pay the sum you have saved to reduce the mortgage.

My Halifax mortgage allows an overpayment of 10% per annum with no charge (you might have something similar given you £100K to £10K figures above). If I want to overpay in addition to the 10% I am charged between 2 or 3% of the amount overpaid, so for every £10,000.00 I want to pay off over the 10%, the charge would be between £200 to £300. The small sum would not prevent me from paying the £10K off.

It is all about the terms of your specific mortgage offer.

dimbo61

You could ask to reduce your term and therefore pay a bigger mortgage payment each month so give them a call and ask

saphydog

cheers, it seems that saving til then end of my fixed term seems the better option and then paying a chunk off. At least its in my account as security

hillcats

GuidoT wrote: »

give Halifax a call to clarify (they are helpful on the phone - 08457 273 747).

Err no, dont be ripped off by them as well... try looking at https://www.saynoto0870.com rather than calling premium profit numbers!