10% over payment allowed (TSB)

anna42hmr

hello

wondering if any one can help as cannot find answer on tsb website and the mortgage centre is closed now for the weekend.

I am allowed to pay 10% off TSB mortgage without any ERC's I wondered does any one know if the 10% allowance is a calendar basis (i.e. January - December) or on a rolling basis, i.e if overpayments are started in March then it would be March-February.


The reason I am asking is that have set up to over pay via increased direct debit but I should also be able to pay off extra amounts due to a work bonus and share save maturities at different times of the year so the overpayments will be uneven through the year.

There may also be some extra above the 10% limit which i intend to also use to overpay - but I will hold it in a savings account until the repayments are allowed again.

I have found from their website that the 10% amount is determined by the balance in January (or the month the mortgage was taken out) but does that mean that the overpayments made reset at that point as well.

I.e if i pay the 10% between march and December and hit the 10% would i be able to continue overpayments from January with the new 10% amount

or

Would i have to ensure that the payments made in they previous rolling 12 months does not exceed the 10% (i.e if all overpayments made in that period march-december 2015 meet the 10% to not be able to restart overpayments until after March 2016 when the previous march's overpayment had dropped off)

JPB123

The 10% overpayment allowance is typically 10% of the mortgage balance at the anniversary of completion.


Eg: Mortgage balance £100k
Overpayment £10k.


You can pay up to that monthly or as one go in the 12 months after completion. If you go over the 10%, the ERC is payable on the extra.

I am an Independent Mortgage Adviser


You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice

anna42hmr

Thanks for the help i appreciate it,

my mortgage is 80,950 and was completed 19 January so the o/p's allowed would be up to 8095.

My o/p via direct debit is £250 per month (from first payment in february) so over 12 months via direct debit will overpay by £3k. That would mean that between now and then i have a further £5095 allowance

I intend to pay extra £1k from the bonus i get the end of this month and the remaining £4095 once the sharesaves mature later this year. That would mean that any excess from the share saves can be banked in a savings account until the anniversary of the january draw down and used then when the clock re-starts so to speak.

I was worried that i could accidentally exceed the limits over the 12 months if on a rolling basis as payments not equal each month. (i.e if i overpaid the 8095 between now and january 2016, but made a payment say £1k in feb 2016 but as i only overpaid £250 year before that 750 difference could potentially push me over the 10% if on a rolling basis. But if the limits are reset on a once a year basis rather than over a rolling basis that will be fine.

thanks again for the help, i appreciate it

Lyncroft

Sorry to interrupt but is there a calculator to help on this type of overpayment?

anna42hmr

Lyncroft wrote: »

Sorry to interrupt but is there a calculator to help on this type of overpayment?

hi, no problem there are a few available, there is an approximate one on this the main mse site, but is not as specific/acurate as others as gives a rough idea

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

there is a good one somewhere that someone else on the forum posted a link to, can't find it quite at the moment, but will add the link as soon as i find it (as i only saved the spreadsheet download where i added my figures rather than the site link that takes you through to it.

edit: can't find the link to the one i specifically use but another good one can be found via this link:

https://forums.moneysavingexpert.com/discussion/1157173

anna42hmr

OK found the link to the spreadsheet/calculator i use , its at this link http://www.thismuchiknow.co.uk

just search mortgage and it takes you to the post and was loaded on the site on 7 may 2008 (in case search doesn't find and you need to go back chronologically)

Lyncroft

Great - thanks very much!

Flower1976

Hi there , with tsb it is definitely 10% of the balance at 1 January that can be overpaid between January and December of that year. It then starts again the following January.
Flower

anna42hmr

Flower1976 wrote: »

Hi there , with tsb it is definitely 10% of the balance at 1 January that can be overpaid between January and December of that year. It then starts again the following January.
Flower

Thanks thats great, I appreciate the replies everyone.