Question about over paying Mortgage

Ronaldo_Mconaldo

We have been overpaying our mortgage quite consistently this year; £500 each month. Anyway Santander sent us a new statement each time we over pay to show the new end date (we reduce the term not the monthly repayments) and how much is outstanding. On this it also shows the amount that we'll be paying each month for the next three and also at the bottom it shows the end of the fixed period and how much we will be paying from that point onwards based on the expected rate of 4.24%

So, I'm just looking back and it seems that each month they say our fixed period ends in June 2013 however, the expected monthly payment seems to creep upwards by a pound every time I overpay. Also they show the next three payments but these also seem to creep up from £700 a month to £703.50 per month from then on.

Can anyone think why that might be? Hopefully this post makes sense.

Peelerfart

Please,

I have no wish to sound in any way flippant but isn't it perhaps an idea to ask them ?

Please post back with their response

PF

TrickyDicky101

Possibly because they round the repayment up/down so that the mortgage ends on a repayment date.

dimbo61

Well done on the overpayments but I have know idea why you get statements every single time you overpay and its no wonder santander is in such a mess

TrickyDicky101

dimbo61 wrote: »

Well done on the overpayments but I have know idea why you get statements every single time you overpay and its no wonder santander is in such a mess

I'm pretty sure I get something similar from the Nationwide whenever I overpay (although it only has the new end date and not the outstanding balance).

dimbo61

I overpay every single month and get a statement once a year after 31-12

flipper_72

Santander send us a statement on our mortgage every month irrelevant of whether we overpay or not!!! Our payments are the same but our end date gets closer with our overpayments.

SAHD_Jim

TrickyDicky101 wrote: »

Possibly because they round the repayment up/down so that the mortgage ends on a repayment date.

what he said

if you ask me

sooty&sweep

Hi

Does the overpayment they show equal the extra you pay on top of your mortgage payment ?

Your normal mortgage payment is mostly interest but also a small amount paid off the mortgage. At the start of the mortgage the amount you pay off the mortgage is very small but as you further on it will increase because less owed and so less to pay interest against so the interest element reduces and the actual payment against the mortgage increases.
When you make additional payments against your mortgage the proportion of interest v capital repayment shifts faster because the loan is reducing faster so less interest to pay so if you keep the payment the same more of that payment will go against paying off the mortgage.
So the additional amount you pay against your mortgage should increase if you take your additional payment + the extra bit from within your mortgage payment.

I could be totally wrong but its the only explanation I could think of !!!

Jen