Are we losing out ?

We have a Mortgage with Accord and the repayments were £631pm over 25 years.
We've been overpaying quite a lot (but below their 10% cap) and after the first year they reduced our repayments to £597, due to the overpayments I suppose.
To counteract this we now overpay what we did before but also another £34pm to make up the difference between the original £631 & new £597.

Are we losing out in any way. Should I ask them to put the repayments back to the original amount or doesn't it affect us ?

Cheers.

Replies

  • DeadbeatDeadbeat Forumite
    133 Posts
    Debt-free and Proud! Mortgage-free Glee!
    My own mortgage lender (RBS) tried this on with me as well. They're reducing your payment amount to try to keep the loan term at its original length (and coincidentally make more interest off you as well).

    It doesn't make any difference to your overpayment plan if you make additional payments to make up the original instalment amounts.

    However you should be able to ask your lender to set the regular instalment at a fixed amount (eg, the amount you were paying before you started the overpayments). That will reduce the term of the mortgage even if you make no further overpayments.
  • A_Frayed_KnotA_Frayed_Knot Forumite
    3.2K Posts
    Sixth Anniversary 1,000 Posts Name Dropper Photogenic
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    Yes, they not only tried this on with me as well, but unfortunately got away with it :mad: as I didn't know any better, but I do now.:D Won't get away with that one, again.

    Don't let them win, so long as you pay the difference and what ever else you want as overpayment, you will win over them, and keep an eye on total o/p as they may charge.:(
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
    MF[STRIKE] March 2030[/STRIKE] Yes that does say 2030 :eek: Mortgage Free 21.12.18 _party_
    Now a Part Timer from 27.10.19
  • mrssjsmrssjs Forumite
    609 Posts
    Part of the Furniture Combo Breaker
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    We also have our mortgage with Accord, however we have a static payment set-up, so when they reduced the monthly payment, we did get a letter from them saying they would still take our current static payment unless they hear otherwise from us. Is this the correct way? - so in essence we *are* reducing the term of our mortgage?
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