Mortgage Overpayments

me1234

Hi everyone

I am currently overpaying on my mortgage with RBS every month of £800.00. I am due to reach my 10% annual overpayment limit soon, which refreshes in October 2016. Until then overpayments are charged at 2% ERC.

I'm not sure what happens if I go over the 10% limit before October? Does the ERC get added to the mortgage? If yes, is there any point overpaying as the charge will mean more interest in the long term? Should I wait till October before making further overpayments?

enjoyyourshoes

ERC can be punitive, so don't overpay the overpayment allowance.

The only time its worth doing it is normally towards the end (1yr to 18 months) of the term.

But your charges are 2% which is substantial , so the above timeframes will be shorter.

If you want to remortgage do a like for like comparison and factor in the ERC. Dependent upon the current fixed you are on it may be worth looking into this to convince yourself you have looked into all of your options.

HSBC & FD are doing good 5 year fixed currently