Post office - Overpayments

MattAsp

Hi guys,

Just flicking through the post office mortgage details and the subject of overpayments. could you have a look at this extract,

"You can overpay at any time during your mortgage term. If in a promotional period, you can overpay a minimum of £500 and a maximum of 10% of the outstanding mortgage balance (as at 31st March the previous year) without incurring any early repayment or administration charges. After the promotional period the amount you can overpay is unlimited, however if you pay off your mortgage in full charges may apply. When overpaying you can either reduce your monthly repayments or reduce your mortgage term. You can only reduce your mortgage term after the promotional period ends and an administration fee of £60 applies."

Does this mean that if i make overpayments in the first 2 years it will only reduce my monthly payments? so after making overpayments for two years... once in the third year the actual period of the mortgage would be the same?

and if so is this normal?

Sorry if i'm being dumb but it is quite crucial for my choice of mortgage.

Anybody had any problems with Post Office Mortgages?

Cheers,

Matt

dimbo61

Yes the mortgage term would be the same but you would pay less every month because of the overpayments !!
All you have to do after the first 2 years is ask that your mortgage payment goes back up to the amount you were paying to reduce the term !
As with alot of fixed deals you are alowed to Overpay by upto 10% which is much more than most people can afford in the early years of a mortgage
Once the 2 years are up you can pay as much as you like each month

MattAsp

Thanks for the reply,

One more thing, is this the general practice on mortgages? Can you get a mortgage that will allow overpayments during the first few years that will reduce the term?

THanks,

Matt