Paying off your mortgage when overpayments are limited

Floxxie

Hello everybody,

I keep on noticing that there are a number of people who state that they can not make any over payments or can only make x per year or more than y per month. I'm wondering whether the suggestion below would help?

I'm with the Abbey on a 2 year tracker. I am allowed to make 10% overpayments a year on the outstanding balance but each payment made must be £500+.

Every payment had to be phoned through (to advise them that it was going to be made) and although it wasn't a great hassle, it was annoying. On one of my many phonecalls to Abbey I was asked why I hadn't altered the monthly direct debit payment instead. I was told that as long as I didn't pay off the entire mortgage within my tied-in period then I could increase (and decrease) the monthly amount and still have the 10% overpayment option.

So I wrote a letter and increased the direct debit to an amount that suited me and told them that I wanted the term reducing not the overall monthly payment. The result was a reduction of 7 1/2 years and no penalties for doing it.

The above method was not detailed anywhere in my paperwork and as far as I thought, I could not do it but thinking logically why wouldn't you be able to do it as long as you do not pay off the entire mortgage within the tied in period?

I have posted a similar response in another thread but just in case you didn't see it.. I hope it helps somebody!

Fiona