santander mortgage question, paying xtra

tarquinbrandruf

Hi I have a mortgage wth santander , currently 4.76% for £170,000 @ £670 amonth interest only .

The house is worth in the region of £180,000 - £185,000 .

Can I pay say £100 extra each month of the mortgage or do I have to save it up and then pay it of the capital in one lump sum each year .

To transfer it to repayment is close to £1000 A month , I am not ready to do that yet , but might be in a year or 2 .

kev

kingstreet

You need to talk to them about this.

You need to establish if your account is based on annual or daily interest as this will determine if the overpayment will be met by reduced interest immediately, or only once a year.

In addition, you need to discuss with them that you want these payments to come off the capital and are not interim payments of next month's interest.

tarquinbrandruf

Kingstreet Many thanks for that .

ShALLaX

Going on my experience with Santander, they recalculate the interest as soon as the payment is received. Also, I think the minimum amount you can overpay in a single payment is £500, so it sounds like you'd have to save up your overpayments and repay every 5 months.

For my repayment mortgage, overpaying more than 10% of the value of the outstanding balance at the anniversary of your mortgage incurs a penalty. I think this is a 2% penalty for the amount paid above the 10% threshold.

Best check the key facts document you will have received with your mortgage. Failing this, call up Santander and ask directly.

Hope this helps.

tarquinbrandruf

I spoke to the Santander today , as I am on the standard variable I can pay as much back as I want , the catch as there always is:-

You can only do it by by bacs transfer ( that will cost me about £30 each time to do it )
cash , I take it , it means going into a santander each month and paying it to my mortgage account physically .

Cheque Which I dont have at the moment and dont want to do. I cannot set another DD or SO up as they dont accept that . TYPICAL !!!!

I have asked for £100,000 on interest and £70,000 on repayment and that will cost me £75 to set up which I am against paying them , and then my payments go from £675 to £877 , but at least it means a lot of the capital will be repaid when I retire.

I was wondering though if I just pay the extra £200 amonth by going into the branch will this still give me the same benefit .

chalkie99

tarquinbrandruf wrote: »

I was wondering though if I just pay the extra £200 a month by going into the branch will this still give me the same benefit .

No, as stated by ShALLaX above the minimum they will accept is £500 per payment (or, at least, it was the last time I did it) and, importantly, you need to state that you are making a capital repayment, not just pay the money over.

The couple of times I have done it has been like pulling teeth. They are a nightmare to deal with and, what I found remarkable for a bank which issues debit cards to their customers, they cannot accept payments by debit card as "they do not have the facilities". I ended up getting them to issue a counter cheque payable to myself which they then used to send off to the mortgage centre.

tarquinbrandruf

chalkie99, When I spoke to santander they said they will accept £100 a month extra if paid in , in the 3 ways stated , That is because I am on there standard variable and not tied in , in anyway .
The interest is calculated daily .

kev

tarquinbrandruf

Hi , Can anyone tell me if I pay £200 xtra each month myself , will it be the same as me taking out the interest and repayment in one mortage quoted in the other post ? kev