Santander capital repayments

Boomdocker

Hi all, we are waiting to move in to a new home in the coming weeks and are planning to make overpayments, where we can, by way of capital repayments. We are with Santander on a 5 year fixed term. As I understand it we can overpay up to 10% by way of a cheque in January of each year. Does anyone have any tips on how to ensure that this works smoothly? I have noticed people have had issues so I am keen to understand this more. I believe that is the only way to reduce my capital, I can't make small ad hoc payments and I can't view this online, is that right? If I do make capital repayments in this way am I right that my terms will reduce? I am a novice at this but keen to understand how it all works so we can work towards reducing our mortgage early. Thanks for your help.

Boomdocker

Does anyone have any first hand experience of this at all?

edinburgher

We took a mortgage with Santander last year and can make £500+ OPs by cheque (at any point in the year), up to 10% of the mortgage value.

Phone them, let them know you're making an OP (they'll note it on their systems) and then post in a cheque.

Only one OP from us so far, but was very simple.

Sundaysgirl

Hi, I'm on a Santander 5 year fix too, expiring next year. I only recently started to make regular OPs, but I have made a few larger lump sum OPs on an ad hoc basis in the past few years.

As I understand it, the OP year is a calendar year, during which time you can OP up to 10% of the mortgage balance as it stands at the start of the year. As far as I am aware you can make the OPs at any time, as often as you like.

All of mine have been £500+ to date so I can't help you with that (though I've never been told that it has to be over a certain threshold). Some I have paid by cheque over the counter in branch, but recently I just call them to notify that I will be making a capital repayment, they confirm the amount with me and note on their system then I make the transfer online. I bank with Santander too, and though my mortgage account isn't linked, the account number (but not balance) does show on my accounts page when I log-in. I then just make a regular online payment to my mortgage account number, same as you would if you were paying anyone else. I usually receive a letter confirming the capital repayment a few days later, followed by a statement showing the new loan balance and the revised monthly payment (even when making a capital OP, the monthly amount will drop by a few pence).

Only point to note is that once they overlooked the fact that it was capital (even though I stated this to them on the phone) and then didn't take my monthly SO, so I had to call to rectify - and they backdated the interest. So keep an eye out for this happening.

Obviously worth clarifying with them if you call up to make an OP, as you may be on a different product. Also, avoid going over the allowed threshold as you are likely to incur early repayment charges.

Sorry for the long post, but hope this helps - and good luck with the OPs, it gets addictive!

edinburgher

My mortgage account details also appear online, thanks for the tip :beer:

ixia

Hi I have just taken out mortgage with Santander I telephoned them on Thursday and they told me I could make payments over the phone and that there wasn't a minimum payment of £500 as long as the OP reduces the mortgage term by at least 1 month.

Maybe worth checking, I was quite happy about that however I am now wondering if he has given me the wrong info as everything I have read says minimum of £500.

My first payment doesnt go out to the 28th I will call them after that when I make my first OP to double check.

edinburgher

Maybe worth checking, I was quite happy about that however I am now wondering if he has given me the wrong info as everything I have read says minimum of £500.

I have specific written communications from them to say £500+, but they seem to be somewhat unsure of whether or not they want to stick to it!

sunnysurrey_2

Hi, I have a 2yr fixed. We do payments by BACS & although they say the minimum is £500 they will put payments through for less. Beware that by BACS you need to phone them after to tell them it's an overpayment of they'll just use it for your next mortgage payment & not take it from your regular DD at your other bank...

Boomdocker

Thanks everyone. So if I'm understand this correctly, by reducing your capital you have brought the end date of your mortgage closer? Is that right?

Do you get any sort of statement confirming payent and the new end date?

cb4fwh

Re. impact of overpayments, you usually have the option of either reducing the term or your ongoing monthly mortgage payments. I discussed this with Santander when I rang up initially to organise the overpayments. I do not get any sort of statement through the post after each overpayment, only the annual statement as I did previously.

Re. allowed overpayment, my understanding is that you are allowed to make upto £499 overpayments monthly for each of your mortgage products. For example, I have a larger mortgage, and then a second mortgage when I had my extension done. Today, I overpay £998 monthly, or £499 for each product.

You can then also make a overpayment of upto 10% of your mortgage balance each January, minus whatever monthly overpayment you may be making e.g. in my case, lets say I have a mortgage balance of £100000 I would be able to overpay £10000 minus £499 or £9501.

cb4fwh

edinburgher wrote: »

My mortgage account details also appear online, thanks for the tip :beer:

Where, confused! I thought that this was only for offset mortgages?

If I login to internet banking, and try to add an account under borrowings there is nothing to add!