Overpayment options

SG27

cats_ahoy wrote: »

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!

YBS, I'm very happy with them although there has been some poor feedback here recently.

cats_ahoy

Would it be possible to change the term of my mortgage to something much lower (e.g. 10 years, and just pay the changing term fee once), and keep fixed higher monthly payments? Or would they force us to have lower monthly payments as they are more 'affordable' (although we could easily currently manage 10 years at an interest rate of ~3%).

If we did come into financial difficulty could we then increase the term?

I'm just trying to think of ways to not incur overpayment charges with my current lender, or just give up and remortgage else where.

Thrugelmir

cats_ahoy wrote: »

I'm just trying to think of ways to not incur overpayment charges with my current lender,

All you have to do is make overpayments and not to reduce the term in order to avoid paying charges.

cats_ahoy

Thrugelmir wrote: »

All you have to do is make overpayments and not to reduce the term in order to avoid paying charges.

I know that is an option, but I would prefer fixed monthly regular payments rather that it decreasing every time we overpay. At the moment, if we were to overpay the maximum 10% this year, and stick on the SVR, our regular monthly payment would decrease eventually by ~£40. Obviously if we went to a lower interest rate this value would be less, but I am happy to keep the monthly payments fixed. The only options I can think of is to either remortgage, or stick with our current provider and go onto a new product, and ask for a reduced term so the regular monthly payments are more. I am not sure whether the second option is possible though.

choccyface2006

We have our mortgage with The Nottingham too and I agree they make it hard to overpay but we have done so over the phone, we had to pay a minimum of £500 for a capital repaymen but then the interest is adjusted the following day.

I did ask about overpaying by less than £500 over the phone each month and they said we could but the payments would only get applied to the account annually so it wouldn't affect the interest immediately.

After each capital payment they reduced the monthly repayments accordingly and like you we've been told the only way to keep the payments the same is to reduce the term and pay £30.

Since we don't know what the future holds I'd rather not commit to paying more each month so we just save up the difference and the amount we can afford to overpay each month and pay extra £500+ chunks as and when we can.

We are on a fixed rate deal though, I'm hoping to build up enough equity to get a much more competitive interest rate when the deal comes to an end.

Sarah