I may sound stupid but .....

laurajane1

I have only just started looking at these forums, its very interesting, this may sound silly but can you pay any amount extra each month on top of your monthly repayment, if so how do you as mine is direct debit, can you get some kind of payment book? I only got my mortgage a few months ago and i love saving especially as have just started another isa, do all mortgages allow you to pay extra?..

Barneysmom

I can only overpay 5% of our outstanding balance per year without penalties but I'm guessing each mortgage provider has different rules.

You can elect to pay a set amount per month, if you give them a ring they'll probably have a permission form to take the money from your account each month till you tell them to stop. (that's what my bank does anyway)

coldcazzie

Have a look in your mortgage terms and conditions, there will be a section on making extra payments. Either you can make lump sum payments, they often give a limit on the size of these, or you can request to increase your direct debit in the same way you could adjust your gas or electric ones if you wanted.

Sunnyday

I was allowed to overpay a maximum of 10% of the amount borrowed whilst we were on the fixed period, when the fix ended i could overpay any amount that i wanted to. Best ask your lender or read through your paperwork.

I had to ring up every month and tell them how much i wanted to overpay and they did an additional direct debit for each transaction, we agreed the date that it would be taken from our account at the same time.

Very straightforward - i loved making those calls

Beware, once you start it will become very addictive and you will save thousands

Good luck

SD

djl

Yes we can pay £500.00 extra with Nationwide each month, check you T&C's as most lenders allow overpayments
HTH

laurajane1

Thanks everyone i will look through my paperwork, i think i remember reading something about 10%, so will start doing this next year. Will it shorten my mortgage by much if pay 10% more each month.

Sunnyday

Have a play around with some of the calculators on THIS site.

I like the snowball calculator as well as the mortgage one. Be prepared for a shock when you find out just how much its possible to save.

SD

ZARA

beware as some lenders charge an admin fee & add it to sub account, i know C&g do, direct debit op on top of monthly payment is free but if you ring & pay off a lump sum towards their 10% allowance they charge £10 admin fee.

Keeping_Motivated

I am with Nationwide and I'm not tied into a deal at the moment so I can overpay as much as I want so I've just been sending anything spare (sometimes really small amounts) via my on line banking as and when I want.

coldcazzie

laurajane1 wrote: »

Thanks everyone i will look through my paperwork, i think i remember reading something about 10%, so will start doing this next year. Will it shorten my mortgage by much if pay 10% more each month.

Best thing you can do with that is ask them. Our payments were £444.90, so I asked them to round it up to £500 (an increase of £55.10 each month) and just by doing that we have reduced the term from 34 years remaining to 27 years remaining, and saved about £20k in cumulative interest...

So yes, overpaying will reduce your term, by how much depends on how much extra you pay each month/year.

jondrayton

You can often work around the overpayment limits by changing the term of your mortgage. I have done this on several occasions with Abbey and Nationwide and did not incur any charges or penalties.