Advice on Halifaax overpayment

Hi everyone

I have a Mortagae for £127,500 with Halifax with 32 years remaining and my rate is 3.99

I want to pay a lump sum of £9000 off of the mortgage and have used their overpayment calculator to see what effect this would have (the graph shows my mortgage term dropping to 27 years) however the website states:

"If you’ve got a Halifax mortgage, overpayments won’t automatically reduce your mortgage term or your monthly mortgage payment, but could save you money by reducing the amount of interest charged. When the next monthly payment recalculation happens, for example at an interest rate change, the monthly payment will be calculated using the existing remaining term of the mortgage."

I am quite confused by this - the only reason I want to use my savings to overpay is to be mortgage free quicker. How can there be a scenario whereby overpaying does not reduce the term of your mortgage OR your monthly payment?

Has anyone successfully reduced the term of their mortgage by overpaying?

Advise much appreciated!


  • Lotti1982Lotti1982 Forumite
    153 Posts
    There are two things an overpayment can do, either reduce the term as you wish or reduce the payments, if you make your first overpayment by phone you can specify what you want to happen, their default is to reduce the payments you normally make which I guess is not what you want. Once you've set it up it stays in place for all future overpayments.
    Planning to be debt free by 11/20. MFW Jan 2028 - [STRIKE]86700[/STRIKE] [STRIKE]83057.20[/STRIKE]
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  • edited 16 August 2016 at 8:56PM
    A_Frayed_KnotA_Frayed_Knot Forumite
    3.2K Posts
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    edited 16 August 2016 at 8:56PM
    Yes, I have - took mortgage out for 18 years, remortaged 3 & half years later for 8 years, therefore took 6 & half years off my mortgage, and have been o/p since I remortgaged last Oct, therefore taking another 19 months off my mortgage so far.

    As Lottie says. But two things to watch out for

    1. When o/p if you have any sub accounts, to make sure the o/p comes off the total with interest being added - you can specify which account you allocate your o/p. Don't let them tell you, you can't.
    2. When you go to re-mortgage, then that's when they would either reduce your payments to still pay over the term you took the mortgage out OR you can reduce your term to keep the same payments, taking into account the o/p you have already made.

    When I o/p, I can choose which account to reduce, as I have 2 that charge interest and 1 that doesn't, no prizes for guessing which one I allocate my o/p's to.
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
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