Overpaying impact on monthly payments

martinsurrey

amnblog wrote: »

In your post your property sounded dangerously close to this:


https://www.gov.uk/private-renting/houses-in-multiple-occupation

tenants form a HMO, lodgers dont, and as owner still lives in the property they are lodgers.

easilydistracted

Thanks martinsurrey that's fab It must be 4.59% then or something as my payments are £924 a month about. But the calculation is close enough. Hilariously the 53p a month has been quite motivating even about the short term! I'm aiming at the whole £499 where possible. And my council thinks an HMO includes residential landladies under their special rules, but luckily I don't have enough anyway.

amnblog

martinsurrey wrote: »

tenants form a HMO, lodgers dont, and as owner still lives in the property they are lodgers.

It sounded like multiple tenants and owner elsewhere from original post.

pinkteapot

Don't assume that your monthly repayments will go down following overpayments - check with your lender.

Some lenders don't change your monthly repayment (HSBC don't). The capital owed is just less so you'd finish paying it off sooner. HSBC only recalculate the monthly repayment if you ask them to.

Other lenders do it the other way - reduce your monthly repayment while keeping the term the same.

You need to find out which your lender defaults to, and what you need to do to get your monthly repayments reduced, if they don't do it automatically.

easilydistracted

Thanks pinkteapot, I think I remember something about it being reducing monthly payments first but will double check.

Thanks all, definitely in for the long game by the sound of things!

themull1

I overpay £135 per month and ive asked that my dd payments remain the same and the length of mortgage remain the same. So every month i'm overpaying a tiny bit more because the dd stays the same.

fewcloudy

themull1 wrote: »

I overpay £135 per month and ive asked that my dd payments remain the same and the length of mortgage remain the same. So every month i'm overpaying a tiny bit more because the dd stays the same.

Could someone with more financial sense than me please explain that for me?

My mortgages payments have always remained the same, without having to ask.

I also overpay and the dd is the amount that it always was, plus the amount I'm overpaying by.

So, as an approx example, the dd should be 600 a month but I overpay 300, so dd is 900. Every month, and no instruction was given by me.

The number of years/months till end of mortgage decreases by one month each statement. However on the back of the statement it has words to the effect of if you continue to make your current payments then your mortgage will be repaid by... a date approx 2 years sooner than the end date from front page.

So I'm thinking asking them to NOT reduce the term is pointless, and don't understand why asking them to do so would somehow mean I overpayed even more each month?

fc

Thrugelmir

fewcloudy wrote: »

My mortgages payments have always remained the same, without having to ask.

Some lenders only recalculate the monthly payments due at a change of interest rate i.e. change in BOE base rate. Not least that revising thousands of direct debits every month is an administrative burden. Under the direct debit system borrowers have to be given notice of change as well. So all have to be written too.