Overpayment options

cats_ahoy

I have a mortgage with The Nottingham and I am on the SVR at the moment, looking to either remortgage or get a new product soon. We are looking to make regular overpayments and would prefer to reduce the term of the mortgage. I have been told by the Nottingham if I want to make any kind of overpayment that I have to pay by either cash or cheque in branch, and if I want to reduce the term there is a £30 fee for each overpayment.

Firstly who pays with cheque any more, and secondly I will not withdraw thousands of pounds and walk around with it, so what are my options for overpaying? Also I am not happy about having to pay £30 every time to reduce my term.

It seems like my mortgage provider is making it very hard to make overpayments :mad: The Nottingham recently stopped providing mortgages to new customers, and it seems like they are intent on getting rid of the old ones.

kingstreet

This is what I can find on your lender's website;-

http://www.thenottingham.com/mortgages/existing-nbs-customers/mortgage-faqs/

... and for a lender no longer providing mortgages to new customers, it has a healthy mortgage product offering.

cats_ahoy

Yes I read the mortgage FAQ's page, when we rang them today they said any overpayments are either cash or cheque in branch. Just confused as to why they wouldn't have a simple chip and pin machine in their branches, or any other kind of method where I can use my debit card.

cats_ahoy

Can anyone comment on the fees for overpaying and reducing term with other mortgage providers? Also if they found it an easy process to make overpayments regularly, or found it quite hard?

Thanks

Thrugelmir

If you ask for the mortgage term to be shortened every time you make an overpayment. Then this a contractual change. Which will involve your lender in an amount administration hence the charge they levy.

By making an overpayment and not requesting a change in mortgage term. Your mortgage will still be repaid earlier than it would. As the only time that your lender will change the amount you pay every month is when interest rates change or you change product.

So by paying more than the requested amount by default you'll repay your mortgage quicker.

Hopefully this makes matters clearer and explains your lenders stance.

What's the issue with obtaining a new mortgage?

cats_ahoy

I wouldn't mind paying the fee if I increased my normal monthly payments to decrease the term, but all I want to do is keep my normal monthly payments the same (this makes budgeting a lot easier), and make overpayments regularly when I can.

Do all lenders charge for every overpayment that keeps the monthly payment the same?

Thrugelmir

I missed the part about paying by cheque or cash in branch earlier. This will be due to the fact that there systems aren't geared to receiving ad-hoc payments through the banking system. By requesting payments over the counter only. The credit can be applied directly to your mortgage account. Seems a perfectly reasonable request.

Unlikely that the use of cheques is going to be stopped any time soon. Your bank will issue you with a cheque book if you ask.

cats_ahoy

Hmmm OK maybe I need to think about switching mortgage provider, as I have been reading the MFW diaries, and they talk about being able to see their accounts online, and make overpayments easily etc via online payments, seems much more efficient than having to take cash out.

And I will look for one who doesn't charge me to keep my regular monthly payments the same (if possible?)

getmore4less

Our mortgage payment(not the rate) never goes down only up for the full term of the mortgage.

If rates rise it can go up if the contractual payment required is more.

That becomes the new payment till the need to make it bigger again OR we ask for it to changed.

Barclays/Woolwich Offset tracker, BBBR+0.95%.

SG27

I make both a regular monthly overpayment and ad hoc payments. There is no fees as long as below the early repayment charges amount.

The monthly regular overpayment reduces the term and the odd overpayments reduce future minimum payments. Both effectively do the same thing.

To make an op we just transfer the money to the mortgage account via online banking.

cats_ahoy

SG27 wrote: »

I make both a regular monthly overpayment and ad hoc payments. There is no fees as long as below the early repayment charges amount.

The monthly regular overpayment reduces the term and the odd overpayments reduce future minimum payments. Both effectively do the same thing.

To make an op we just transfer the money to the mortgage account via online banking.

Thanks, who is your mortgage with? I need to go with a mortgage provider like this, as it seems a lot easier than having to withdraw money/write a cheque, go to the branch in town and pay a £30 fee to keep my monthly payments the same!