One-off payments to Mortgage

Owen_Money_2

Hi, I thought I was clued up on this but now I'm confused. We increased our mortgage payments by £250 which was all fine and dandy. We had a some funds left over last month and decided to send £500 as a one-off payment. Today I receive a letter from the bank advising that the have decreased my monthly payments following receipt of the cheque. I thought I made it clear in my letter that the funds were to reduce the amount I owe but what is the right way of saying to the bank ' I don't want you to reduce my monthly payments, but to reduce the term of the mortgage '.

Sorry if I've confused but I think I'm going off my head!!!

Thanks in anticipation.

alanobrien

Sounds like you want them to reduce the term of the mortgage but keep the repayments at the current level.

This in effect will reduce the overall interest you pay during the life of the mortgage.

Anyway, thats how i put it and they seem to have got it ok

Somersetlad_3

You have 2 choices:

1. do what alanobrien says and write to them telling them you want to reduce the term not the monthly payments, or

2. leave things as they are and instead overpay each month paying the monthly sum you used to pay or, preferably, a bit more.

I did the second with the Nationwide when they reduced the monthly payments and not the term.

Owen_Money_2

Thanks to you both thats what I thought I said in my letter, I maybe did not it clear enough, it's just a pain now changing it back to my original monthly payments - I'll know next time to say to reduce the term and not the payments.

Ivrytwr3

I made an overpayment on my mortgage this month stating i wanted to reduce the term of my mortgage; i got a letter thanking me for my payment and my monthly payments have now decreased. GRRRRRR!!!

I rang their mortgage help number, took the guys name and told them I want them to reduce the term of the mortgage but keep the repayments at the current level. "Not a problem"

A week later i got another letter confirming my term had been reduced.

Owen_Money_2

Looks like we'll have to spell it out next time (if I'm lucky enough to do it again!!), but it is a good feeling knowing that you're saving some interest and have shaved some time off at the end of the term - by paying an extra £250 just now I've taken 10 years off the term - just hope I can keep it up.

Ivrytwr3

Looks like we'll have to spell it out next time (if I'm lucky enough to do it again!!),

Nooooooo!!!!! My point is, give them a call, your overpayment can still be adjusted to reflect term time instead of reduced payments.

Give them a call, or write them a letter.

Owen_Money_2

Yeah I've already done that - I meant for future one off payments.

Ivrytwr3

Yeah I've already done that - I meant for future one off payments.

Thought you meant you will do this with your next overpayment. Phew!

Owen_Money_2

Thanks for keeping me right