The Mortgage Works - Overpayments

hufc2002

Can anyone confirm re the interest?

Kayalana99

I think thats basicly saying if you pay off £220 on the 2nd of May you would still be paying interest till 31st May / 1st June.

Wouldn't be to worried though.

hufc2002

Does the monthly overpayment need to be an additional payment or can it be incorporated into my original payment I.e just pay more rather than paying X plus £220?

kingstreet

Is interest calculated daily, monthly or annually?

If it is monthly, as appears to be the case, the capital repayment you make will see next month's interest reduce. You need to tell the lender how you want overpayments to be treated. They will normally give you the choice of lower future payments, or for the term to be reduced and the monthly payment to remain the same.

Similarly, the lender will tell you if you need to set up a standing order to run alongside your direct debit, or if it will simply alter the direct debit amount to collect both the contractual monthly payment and the overpayment at the same time.

hufc2002

Just spoken to the Mortgage Works who have confirmed that my interest in calculated monthly and that I have no limit on overpayments.

Overpayment now set up.