Overpayments Trick!

madhusudhan

Guys, I'm doing a bit of research and maths with an aim of benifiting from fixed rate and making a bit of overpayments. Many lenders won't allow you to do overpayments more than fixed percentatge. Especially HSBC has got this bugging policy that you can't overpay more than 20%of MONTHLY payment. I'm very annoyed with this as it won't let you to pay anything when you have a bit of spare cash. I think I got the workaround: reduce your term with the currnet lender!

If I'm on 25yrs of Mortgage with a Fixed rate of 5.39% for next two years with HSBC, the possiblitiy of overpayments beign 20% of monthly payment - so if my monthly payment is 800, overpayment is just 160.

So, reduce the term from 25 yrs to 20 years (or better 15 years). Once you are out of spare cash, stop your overpayments. This way, you can reduce your capital for lesser (fixed)interest!

Probably an old trick!

Tanks
M

Scott

It is an old trick, and a lot of the time, they'll turn around and say no thanks.

But it's worth a try.