Are they telling the truth?

Batgirl

I called my mortgage company today ( The Abbey ) and asked to pay £50 capital repayment. They said did I want the monthly direct debit or term reduced. I said term and they said they coulnd't take the payment unless it was a full month to reduce the term by, so I said well take it off the direct debit but she said it would only knock 20p so it wouldn't be worth it.

If the do reduce the direct debit amount surely that means I don't save any money on interest in the long term, surely it is only worth doing if it reduces the term.

I am really confised and don't know what to do for the best. Keep the money until I have enough for 1 months payment or pay it now but save no money.

I AM SO CONFUSED :mad: :mad: :mad: :mad:

Thanks for any help

Batgirl

withabix

Keep the money until you've got one month's payment.

Most lenders do what you've described now.

Kaz2904

No no no!
I replied to your other post on MFIT but will retype it here in case others don't see it.

It doesn't matter if they decrease the amount you need to pay, cancel your direct debit and set up a standing order. That way your payment will only change when you want it to.
If you bank online it is extremely easy to make regular overpayments, like paying a bill!
They may decrease your amount but if you remain paying your original amount (ie overpaying without overpaying), then your term will decrease automatically.

This could backfire if (like me) you are restricted to a multiple of your monthly payment as an overpayment (I can't pay more than 5* my monthly payment in one month).
The way around this is that as your required monthly payment decreases, the more likely you are to be able to make a whole months payment in one go and thus reduce the term!