Get a loan to clear mortgage? *update*

Ivrytwr3

That's interesting - i will have to have a read of the t&c.

Thrugelmir

Ivrytwr3 wrote: »

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.

Reducing the term is a contractual change and from their perspective they would have to undertake affordability checks etc. Will be set policy not something that they'll do on case by case basis. Simply keep increasing your over payments.

getmore4less

Ivrytwr3 wrote: »

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.

Stop worrying about the term just overpay what you can that us what matters, if the normal payment drops up the overpayment.

getmore4less

Thrugelmir wrote: »

Reducing the term is a contractual change and from their perspective they would have to undertake affordability checks etc. Will be set policy not something that they'll do on case by case basis. Simply keep increasing your over payments.

They probably don't change the contractual term just keep the payment the same.

Ivrytwr3

getmore4less wrote: »

They probably don't change the contractual term just keep the payment the same.

Exactly that - we have overpaid for years and each annual statement has shown the term reducing and the monthly payments have never altered.

To get clarification on this i have drafted a letter of complaint - any thoughts:

Dear Customer Relations,

Two part Complaint regarding Alliance and Leicester and Santander Mortgages – Mr xxxx

I am writing to you to raise an issue about both my previous Alliance and Leicester (A & L) mortgage and my current Santander mortgage.

The issues that I have experienced are:

Complaint 1 – Alliance and Leicester Mortgage, Account no’s xxxxx:

We purchased a property in 2005 and were on a 5 year fixed rate with A&L - this expired in Dec 2010. We then sold that property and bought another in Oct 2010 at a higher price remaining with A&L for the additional borrowing.

Part 1 of the mortgage was at 4.24% reducing to 1.25% - account number: xxxxxxx.

Part 2 of the mortgage was at 4.24% - account number: xxxx.

As part of the T&C for additional borrowing, why was I not offered 1.25% on both parts of the mortgage? Or both parts reduced accordingly?

To resolve this complaint I wish to seek a refund of over interest payments over the course of this mortgage.

Complaint 2 – Santander Mortgage, Account no xxxxx:

In Apr 17 I contacted Santander and asked the question of can you give me a better rate than the mortgage on Part 2. Your response was to offer combining the 2 x mortgages whilst keeping the Lifetime Tracker of 1% and so the overall mortgage would be at 1%.

Fantastic customer service, however, my main stipulation was that there was no product fee and that I can continue to make over payments in the exact same way I had been doing for the past 10 or years i.e. each and every overpayment does not attract any ERC and it reduces the term not the monthly repayment amount.

I was assured this was the case and I went ahead and moved the mortgage from A&L to Santander.

During Apr 17, I made an overpayment of the usual amount and kept checking on it via online banking – the overpayment just sat there not been applied to the mortgage for approx. 3 weeks.

I called Santander who stated that to reduce the term I must match or increase the monthly amount – something which I had not been made aware of whilst going through the mortgage application process.

I lodged a complaint at the time, unfortunately the result was still the same in that to reduce the term I need to match or increase the mortgage monthly payment. In reality this means instead of overpaying £200 per month, I now need to overpay by a further approx. £30 per month; something I had not budgeted for nor been made aware of.

To resolve this complaint I wish to for my mortgage to remain at the current interest rate of 1% however, I strongly believe I was miss-sold the terms of the new mortgage and seek an appropriate level of compensation.

I look forward to your prompt response on this matter. As recommended by Trading Standards, I would like to keep a complete record of my case, so please reply back via this email account: xxxxxx and/or hard copy response to my home address.

A legitimate complaint or should i just up the overpayment and get on with my weekend?! :rotfl:

getmore4less

Be clear about your issues and your budget.
If the regular payment drops then that drop is in budget just becomes part of an overpayment budget.
Net cost pm does not change.