Santander Mortgage confusion!

poppetbelle

Hi everyone,

I've been browsing the site and the internet and the forums and can't find an answer to my question, so hopefully one of you can help!

I have a mortgage with Santander (through Abbey Intermediaries), I recently made an overpayment of £300 (I was really confused by their ridiculously complicated system for overpayments and wanted to make sure it actually went in!). I called them to check that they'd received it and ask them to apply to my mortgage. They asked me if I wanted it to go to the 'term' or the 'monthly payment'. I asked the guy to explain but didn't really understand.

The way I took it was that if I said monthly payment, they would take that amount off of my next monthly payment. So I said term, thinking this would take the capital off of the term of my mortgage. They've just sent me a letter confirming that it's taken 3 months off of my redemption date, but they are changing my monthly payments... Should I have said monthly payments?

Can anyone who's with Santander help?!

Thanks!

Mrs_Rachel_Trelfa

Hi poppetbelle,

My mortgage is directly with santander rather than Abby but I hope I can help.

If you ask to reduce the payments it means that your contracted monthly payment will go down. Great if your worried that income may change, however you end up paying approximately the same interest so not really saving money.

Reducing the term saves you interest. your £300 overpayment saves you 3 months times your monthly payment amount. Your savings is the difference if that makes sense.

We find with our mortgage that when we make an overpayment and they recalculate the term our repayment amounts can change by a couple of quid as they are adjusting for the remaining term As a overpayment could technically take half a month off but the bank cannot take a payment off you mid month so they amend the payments so that your mortgage ends on your normal monthly payment date.

I hope that helps?

zootie

I'm Santander from abbey too. I was told overpayments could only be made in amounts of £500. It does seem a complicated system to have to ring up each time to say that you want the payments to go off the term of the mortgage. I was just told that £500 reduced the term by 1 month and no adjustments were made to the regular monthly amount.
Well done in making your overpayment.

poppetbelle

Thank you both!

@Zootie - I have it in writing from them now that any payment over £500 is automatically picked up by their systems, under £500 is not.

Am just about to put my bonus on there, yippee, that should take it down by another 10 months!!