Overpayment question

spanglevie

I have recently made an overpayment of £12000 on my repayment mortgage.

I received a letter from the lender saying thank you for your payment etc etc….. and that they have applied the payment by reducing each part of the loan in the same proportions. It says if we want to payment to be made to a specific part of the mortgage to let them know.

So I'm just asking the question if this is the best thing to do, or is is better to have the full amount reduced on the capital or the interest?

Thanks

d70cw6

so you have two (or more) mortgages on the property?

d70cw6

in any case, make sure they repay the capital element of the loan, not the interest.

spanglevie

No only one mortgage - a repayment mortgage.

d70cw6

what's the "each part of the loan" gubbins about then?

JimmyTheWig

Have you taken out additional borrowing on your mortgage at some point?
Have you ported your mortgage at any point?

spanglevie

Nope not that I know of. Yes I was confused about each part of the loan too. I assumed they meant some went towards the capital and some went towards the interest?

JimmyTheWig

I think you need to contact them and ask them what they mean.

JimLad

Genereally when you make an overpayment they either reduce the monthly payments and keep the term the same. Or shorten the term and pay it off the capital.

What your describing sounds odd...i would definately phone them for an explanation

HHarry

Our mortgage is in two parts - part intrest only, part repayment, so when I make an overpayment I have to choose which 'part' I want to reduce.

Could yours be something similar?

spanglevie

The sub accounts are fees that were added to the mortgage apparently. I have rung them and asked for the full £12000 to be taken off the loan amount only.