Post Office Mortgage

tinofpeas

We are in the process of completing on a remortgage to the post office at the moment. We are looking to overpay by around £150/£200 monthly.

However I believe with the post office they will reduce our monthly payments as opposed to the term, is this correct?

If my understanding is correct I'm not gaining anything from this, so could I manually up my overpayment by the amount they decrease our contractual payment by? (I hope this makes sense!)

Would they write to me every month with my new payment amount and I would then adjust the standing order to compensate this?

Our figures are £112k over 25yrs fixed @ 1.65%

Thrugelmir

If you pay by standing order rather than direct debit you can control the amount that you pay. Providing you pay more than the lender is expecting you'll be fine.

tinofpeas

Thank you

From reading these forums and the mortgage details, the post office seem to manage overpayments different to other providers and I was after some specific advice relating to them & how people do effectively mange there overpayments

Sunny2good

what does your illustration or AIP say? when I last looked into it, they allowed overpayments in two ways, but both reduced your term, not monthly amount.

An overpayment by cheque which took effect from the next day onwards (recalculating interest and how much you owe) and the second was by a standing order which took effect from the 1st of the next month.

andys15

I reduced my term with the post office. I am not tied into any fixed deals or anything. I had to pay £60. If you are remortgaging I assume you are coming to an end of a fixed term. I don't understand why you cannot just reduce your term for free as you are going onto a new deal.

tinofpeas

We are moving to the post office from another provider, fixing my deal for two years.

With my current provider I can over pay and keep my dd amount the same, which is automatically reducing the term, however upon reading the offer from the post office

'You can overpay at any time during your mortgage term.

If you’re in a promotional period, you can overpay a minimum of £500 and a maximum of 10% of the outstanding mortgage balance (as at 31st March the previous year) without incurring any early repayment or administration charges.

Once the promotional period is over, the amount you can overpay is unlimited, however if you pay off your mortgage in full charges may apply.

You can either reduce your monthly repayments or reduce your mortgage term but remember, you can only reduce your mortgage term after the promotional period ends. There’s a £60 admin fee for this.'

It is the last paragraph that i was seeking clarification on - as it suggests they would adjust my monthly payment after any over payment and I can only reduce my term at the end of the fixed deal

andys15

Well you should have just told them the term you wanted to do it over, prior to remortgage.

tinofpeas

andys15 wrote: »

Well you should have just told them the term you wanted to do it over, prior to remortgage.

I really thought that this was a place to seek help and advice?! Not smart comments

Everything I have read about overpaying is that you don't commit yourself to increased payments and overpay when you can, by reducing the term I would be committed to the higher amount - which I don't want to do, otherwise yes I would have reduced the term

All i was after is the potential that somebody may be currently overpaying monthly with the post office

I know not to in the future

andys15

? I wasn't being funny, just saying you should have told them you wanted to reduce term.