Get a loan to clear mortgage? *update*

getmore4less

When you say applied did it not reduce the balance?

kingstreet

Ivrytwr3 wrote: »

Thanks GM4L - exactly what i was after!

OK.............the plot thickens.

I made the call to my mortgage provider and asked the question of can they give me a better rate than the mortgage on Part 2:

They said they can combine the 2 x mortgages whilst keeping the Lifetime Tracker of 1% - so we now have one mortgage at 1%!!!

I queried this - where is the catch? I can continue to make over payments and there is no product fee.

Thank you soooo much - it was well worth a call to them!

When you took it, were you offered the increased borrowing at the same rate as your main mortgage? If not, you should have been!

In your A&L terms, there should be a condition which permits you further advances at the same terms as your main mortgage. You may be due a refund if this wasn't offered to you when you borrowed more.

Ivrytwr3

Ok.....

We did not borrow anymore, we just switched from a and l to santander due to them offering a better rate - 3.99 down to 1.

We are overpaying because we want to mortgage free asap - i know if we put it into savings we will use the money for something else!

Santander are saying that if we make an overpayment that is LESS than the monthly amount it will reduce the monthly payment, if we match or INCREASE the monthly amount it will reduce the term - it is the term we want to reduce, hence we need to increase our overpayment something which we were not made aware of or what we agreed to.

Thrugelmir

Ivrytwr3 wrote: »

Santander are saying that if we make an overpayment that is LESS than the monthly amount it will reduce the monthly payment, if we match or INCREASE the monthly amount it will reduce the term - it is the term we want to reduce, hence we need to increase our overpayment something which we were not made aware of or what we agreed to.

You accepted the contractual terms of the new mortgage. Although not necessarily implicit this would cover your acceptance of agreeing to the new terms by which you would be allowed to make over payments. Lenders can move the goalposts (within reason). .

getmore4less

Ivrytwr3 wrote: »

Ok.....

We did not borrow anymore, we just switched from a and l to santander due to them offering a better rate - 3.99 down to 1.

We are overpaying because we want to mortgage free asap - i know if we put it into savings we will use the money for something else!

Santander are saying that if we make an overpayment that is LESS than the monthly amount it will reduce the monthly payment, if we match or INCREASE the monthly amount it will reduce the term - it is the term we want to reduce, hence we need to increase our overpayment something which we were not made aware of or what we agreed to.

The term is irrelevant, until any overpayments start hitting ERC*, as term just sets a min payment.

Total payment is the thing that matters if they reduce your payment you increase your overpayment.

if you do a bigger overpayment every now and then that should reset the term if that is what you really want .


* I think all you mortgage is now on this 1% rate with no ERC.

getmore4less

picking this up seperately.

Ivrytwr3 wrote: »

Ok.....

We did not borrow anymore, we just switched from a and l to santander due to them offering a better rate - 3.99 down to 1.

............

When did you get that extra money?

I think what Kingstreet is asking is when you took that extra why was it on a 3.99% when it could/should have been on the 1% as per your original conditions.

seems they have done this move now but it may be it should have been at that lower rate all along.

If that is the case then you probably need to follow that up.

ok found the thread where you got that extra
https://forums.moneysavingexpert.com/discussion/5173332

We bought a property in 2005 and were on a 5 year fixed - this expired in Dec 2010.

We then sold that property and bought another in Oct 2010 at a higher price. We ported that mortgage and got another to cover the cost of the property.

So we now have 2 x mortgages for the same property (with me so far?!) We have been overpaying the higher % mortgage at £190 per month.

One part of the mortgage stands at £60k @ 1.25%
The other part at £32k @ 4.24% with 9 years to go or 6 if we continue with the overpapyments.

Can anyone advise, should we stick with what we are doing or are we able to take the 4.24% part of the mortgage elsewhere?

looks like you got a 5y fix in Oct 2010 if it was the case that you should have been able to get extra borrowing on that (looks like a base+0.75% tracker follow on rate) then you could be due an adjustment.

kingstreet is more knowledgeable on the details of the rules of lenders so may be able to comment more fully.


What was the original extra deal back in 2010?
can then do a rough calc if that should have been on the other rate.

getmore4less

have things changed since this post as it describes overpayments that are different to what you described here.

http://forums.moneysavingexpert.com/showpost.php?p=42883158&postcount=1

Ivrytwr3

I'm confused now!

We originally had 1 property with one mortgage with A&L.

We moved and upsized in 2010 requiring extra money. However, as we had a great rate on the original mortgage, we chose to stay with A&L and ended up with a 2 part mortgage at 2 different rates.

It was only in the last few weeks that after a recommendation from MSE that i called Santander and they offered us both parts at 1%.

No ERC etc, however, they are saying that any overpayment will reduce the monthly payments, not the term. If i wish to reduce the term i need to match or increase the monthly mortgage payment.

I have increased my overpayments by £30 per month which meets the monthly mortgage payment - we want to be mortgage free asap as oppose to lowering monthly payments.

silvercar

I have increased my overpayments by £30 per month which meets the monthly mortgage payment - we want to be mortgage free asap as oppose to lowering monthly payments.

If the extra £30 is a struggle, you could just not make a monthly overpayment once every 7 months. That would have the same effect (more or less) as overpaying £200 a month every month.

silvercar

....£32k @ 4.24% ....

I think people are suggesting that you should have been offered that at 1.25% as part of the original T&C on further borrowing.