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10% overpayments

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Hi
May be daft Q but my lender allows 10% OP every year, we have a 10 year fixed rate and hope to be MF at the end of those 10 years (fingers crossed!).


Do you ring your lender to find out the 10% you can overpay each year or can I work it out and just try and make those payments? Is it calculated from January or from the month your mortgage started? Understand what I can OP each year will decrease, so just trying to work things out...
Thanks

Comments

  • MissLemon
    MissLemon Posts: 112 Forumite
    Ninth Anniversary 100 Posts Mortgage-free Glee! Combo Breaker
    Mine is calculated from the month my mortgage started. With my bank I can see total overpayments and how much allowance I have left when I log on to the internet banking but I can also call them and get that information.
    Original MF Date January 2035. MF Date February 2022
  • System
    System Posts: 178,330 Community Admin
    10,000 Posts Photogenic Name Dropper
    Over 10 years (5 years even) investing would almost certainly beat any mortgage, and by keeping a mortgage you're more protected against title deed theft...
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • Mine is 10% per calendar year so whatever your balance is on 1st Jan. I would ring up and ask what your terms and conditions are for your mortgage. Also u can ask them how much of your 10% you have left to pay so u don't incur a charge.
    Balance at start of mortgage Dec 2011 £87500
    1 Jan 2015 = £73,735 Overpayments = £3,360 (average £280 p/m)
    1 Jan 2016 = £66,558 Overpayments = £4,770 (average £397.50 p/m)
    1 Jan 2017 = £57,756 Overpayments so far Jan £0 Feb £550 Mar £3022 April £690 May £1513 total £5775
  • beanielou
    beanielou Posts: 95,252 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Mortgage-free Glee!
    Mine is from date mortgage taken out.
    Best to check with your lender :)
    I am a Forum Ambassador and I support the Forum Team on Mortgage Free Wannabe & Local Money Saving Scotland & Disability Money Matters. If you need any help on those boards, do let me know.Please note that Ambassadors are not moderators. Any post you spot in breach of the Forum Rules should be reported via the report button , or by emailing forumteam@moneysavingexpert.com. All views are my own & not the official line of Money Saving Expert.

    Lou~ Debt free Wanabe No 55 DF 03/14.**Credit card debt free 30/06/10~** MFW. Finally mortgage free O2/ 2021****
    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.

    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    ***Keep plodding*** Out of debt, out of danger. ***Be the difference.***
    One debt remaining. Home improvement loan.
  • Frufru23
    Frufru23 Posts: 40 Forumite
    Mine is 10% of the initial mortgage when the 10 year fixed commenced - so, if mortgage was £100k, I can OP £10k p/a. And its annually from the date the fixed rate started, so for me it runs from 1st Aug to 31st July. I'm with Nationwide.
  • louloubelle79
    louloubelle79 Posts: 411 Forumite
    100 Posts
    Thank you will call Santander tomorrow to find out
  • louloubelle79
    louloubelle79 Posts: 411 Forumite
    100 Posts
    Just seen on their website

    You can overpay up to 10% each calendar year (January to December) on your fixed rate loan amount without paying an early repayment charge. A minimum payment of £500 applies.

    So assuming January 2018 will be 10% of my mortgage then not what I started with January 2017 ?!
  • Ms-Bristol
    Ms-Bristol Posts: 27 Forumite
    Sixth Anniversary Combo Breaker
    Each lender will have slightly different rules. If you want to pay the 10% as soon as possible each year, the anniversary will be important. Mine is 1st July and if you read my Project 2018 thread you'll see that getting the balance on the anniversary can be easier said than done! But you're better off calling your lender to ask what their rules and dates are.

    One minor point you are allowed to pay 10% of the outstanding balance each year so by paying that amount every year for ten years you won't pay it all off and you'll still have a bit left to pay. This is because you don't get to pay 10% of the original balance each year, so your overpayments shrink.
  • louloubelle79
    louloubelle79 Posts: 411 Forumite
    100 Posts
    Thank you I aim to save some also to hopefully pay what's outstanding at the end of the 10 years ..fingers crossed
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