mortgage overpayments penalty free - !0% of what?

barbarafloyd

Hi folks,

I have a fixed rate mortgage which allows 10% overpayments each to be made each year without penalty. But 10% of what? When I phoned last month, I was told it was 10% of the balance as at 21st September 2012 (the date I took the fixed rate out) which was roughly £14, 500.
When I phoned today, I was told I could pay £13, 473. I'm really confused, does anyone know how the 10% is calculated? I'm with RBS, thanks for any help!

kingstreet

It's normally a rolling twelve months, so you'd need to know the balance today and take 10% of that, off the top of my head.

Ronaldo_Mconaldo

It's 10% of the balance at the start of the calendar year for me. Although it would be the start of the mortgage if it was taken out part way through the year and then change to the 1st of January at the year end.

kingstreet

It would be helpful to know which lender it is.

As an example, this is the Halifax clause from a KFI;-

As a concession, in any one year you may repay up to 10% of the amount outstanding on your special rate product without having to pay an early repayment charge.

which is as clear as mud, TBH.

barbarafloyd

Hi, its Royal Bank of Scotland, the girl in the branch told me it was 10% of the balance as at 6th April, the girl I spoke to on the phone first time told me it was 10% of the balance as at 21st September. And the latest person I spoke to didnt know how it is calculated! So confused!

y002cjw

Ask for it in writing. Cant go wrong there.

Get names when speaking to people and play them off each other.

Then pay the most you can afford.

Also if any portion of your mortgage in SVR I dont think there are any restrictions.

When I took out a NatWest mortgage in 1989 I arranged that part of it was SVR just so i wouldn't be restricted in the over payments I could make.

Good Luck - over payments are the best investment you can make - imho.

barbarafloyd

thanks, you are right I need to get it in writing, thanks everyone for your help!

argomatt

I have a similar restriction on my RBS mortgage.
I can pay up to 10% of the balance on the anniversary of completion.