Best date to overpay halifax mortgage each month?

class2ldn

Hi all. We've currently got a halifax mortgage which we've just started and only made our first payment.
Our regular payments will now come out on the 1st of each month but I understand halifax calculate the interest daily so which day is best to set a standing order up.
We don't bank with halifax so we have no online facility to check the payments. Is there any way of doing this?
Also is it best to reduce the term or just let the payments decrease? We've been given the account details etc from Halifax.
We are currently on a 2 yr fix for 30 years so would probably look at remortgaging down to 25 years when it's up in 2 years.
Looking to overpay around 100 pm to start off with.
Cheers

freshcotton

Hi


My mortgage is with Halifax however I don't bank with them, but you can have access to an 'online mortgage' account, which shows all the payments and interest over a 12 month period. You cant do much else with it, but its helpful to keep track on the balance.


As interest is calculated daily - you are best to make the payment as soon as you can. I do mine at the start of the month.


When you make an overpayment, it doesn't reduce the term or decrease the minimum payments unless you request a change. I think most people prefer for the term not to be reduced as this gives more flexibility should you ever be in a position where you don't want to 'overpay'

Petal88

I second everything freshcotton said - I'm with halifax for mortgage only and have an online banking account. If the interest is calculated daily then you're best off doing OPs at the start of the month.

class2ldn

Thanks guys our payment goes out on the 1st so is it worth doing it the same day then? Was going to do it tomorrow but best just to do it on the 1st then and each month after?

class2ldn

What do we need to ask in terms of the overpayment then? I'd rather reduce the amount to give us that flexibility for a bit. Do we just ask for that?

Petal88

Reduce the amount of what? I'm not sure what your question is.

As for overpaying - as the interest is calculated daily you will be instantly better off with each OP, so get started as soon as you can. I.e. do it tomorrow and then from then on the earlier on in the month, the better.

class2ldn

Sorry I mean if you reduce the term instead of the amount. I'd rather reduce the monthly payments rather then reduce the term to begin with.

A_Frayed_Knot

class2ldn wrote: »

Hi all. We've currently got a halifax mortgage which we've just started and only made our first payment.
Our regular payments will now come out on the 1st of each month but I understand halifax calculate the interest daily so which day is best to set a standing order up.

Best time to overpay is as soon as you have the cash to do so, as soon as you overpay, you will not pay interest on that overpayment ever again.

We don't bank with halifax so we have no online facility to check the payments. Is there any way of doing this?


I think you may be able to apply online for access to your Halifax Mortgage Account. Can't really do anything with it but you can see how much interest goes on every month and when payments comes off your mortgage, giving you the mortgage balance owed.
Also is it best to reduce the term or just let the payments decrease?


You only get this option when you remortgage, so if this is what you mean, then depends on a lot of factors - see my reply a the end of this post****


We've been given the account details etc from Halifax. - Use this to open an online mortgage account - to see your total mortgage and payments for the past year.
We are currently on a 2 yr fix for 30 years so would probably look at remortgaging down to 25 years when it's up in 2 years. Again - see my reply at the end of this post****
Looking to overpay around 100 pm to start off with - If you set up a standing order for this amount it restricts you, if you went for your bank online option you can pay any amount of overpayment, as and when you want, with Halifax they allow you to overpay 10% of mortgage balance from 1st Jan - 31st Dec in any year without penalties.
Cheers

You say you are in a 2 year fixed, with mortgage for 30 years.


I took out mortgage with 2 year fixed, with mortgage for 18 years. After 2 year fixed ended, I should have entered another fixed, but let it revert to svr. Then some time later (18 months) I remortgaged for another 2 year fixed deal, this time taking it over 8 years. (Reducing my term by 6 1/2 years):D


I worked it out, slightly different to anyone else, but it worked for me. I asked myself how much I could afford every month for mortgage payments, then went to the overpayment calculator, and played around with that until I reach figures that suited me. So I think I kind of worked backwards, knew how many years I wanted to reduce it to, seen how much it would cost me a month (without overstretching myself), then went for that.


I also have to add that since taking out my new 2 year fixed deal , mortgage over 8 years, I have made a new target (in my mnd) of paying off my mortgage within 4-5 years, just with overpayments, this gives me the freedom and choice, if I do it or not, but if I never paid another overpayment, my mortgage will be clear in 8 years time:D


Hope this all makes sense to you, if not, can clear up anything i've confused you with.


Good Luck, overpaying to me is exciting, and cant wait to clear it all off:j

A_Frayed_Knot

class2ldn wrote: »

What do we need to ask in terms of the overpayment then? I'd rather reduce the amount to give us that flexibility for a bit. Do we just ask for that?

I take it you mean for your overpayments, not your mortgage payment as that is what it is, you cannot change this amount as you have agreed this on a 2 year fixed rate.

Go with your online banking for overpayments, that way you are not committed to a certain amount each month, you can choose, when and how much you can/want to /able to overpay at any time (within the 10% restriction) of course:) with a standing order its a certain amount each month until you change it.

An overpayment is just that - you don't need to set up a standing order or "ask" you just overpay when and if you feel you can afford it. Only restriction is 10% of total mortgage in 1 year.

Thrugelmir

class2ldn wrote: »

Thanks guys our payment goes out on the 1st so is it worth doing it the same day then? Was going to do it tomorrow but best just to do it on the 1st then and each month after?

The closest possible date to when you get paid. Better in the mortgage account than your bank current account.

class2ldn

Thanks for all the replies. I'm 32 now and aim to have it paid off by the time I'm 45 so each time I remortgage I'm looking to reduce the term to get it down. Obviously depends on interest rates etc each time I remortgage but it's doable I think. Just need to keep chipping away at it.
So if i overpay it should show on the online account if I set it up?