Cannot overpay

katie4

Hi
i have enquired about overpaying on our mortgage and this was the reply based on your current product deal you cannot overpay but you can make capital payments of up to 10%PA which is 3 times monthly payment


So as our fixed term is ending soon we're looking at reducing the term from 20 to 15 years as overpaying doesnt seem to be an option, and reducing to 15 years will result in us continuing to pay the same monthyl amount we currently do, i know if we kept it at 20 years the monthly amount would reduce but if we cant afford to overpay what theyve suggested it seems to make sense to change to 15 years, i think?

[Deleted User]

katie4 wrote: »

i know if we kept it at 20 years the monthly amount would reduce but if we cant afford to overpay what theyve suggested it seems to make sense to change to 15 years, i think?

If you can't afford to overpay, I'd have thought leaving it at 20 years would be best, as 15 years will commit you to larger payments.

katie4

Deleted_User wrote: »

If you can't afford to overpay, I'd have thought leaving it at 20 years would be best, as 15 years will commit you to larger payments.

the payments dont change from what we're paying now
we pay £360pm now and reducing term to 15 years as we're due to change our rate in the next few months is £368 whereas 20 years its £280
it makes sense to me to keep paying roughly what we are now

getmore4less

katie4 wrote: »

Hi
i have enquired about overpaying on our mortgage and this was the reply based on your current product deal you cannot overpay but you can make capital payments of up to 10%PA which is 3 times monthly payment


So as our fixed term is ending soon we're looking at reducing the term from 20 to 15 years as overpaying doesnt seem to be an option, and reducing to 15 years will result in us continuing to pay the same monthyl amount we currently do, i know if we kept it at 20 years the monthly amount would reduce but if we cant afford to overpay what theyve suggested it seems to make sense to change to 15 years, i think?

That is overpaying

not sure "which is 3 times monthly payment" means

on a £100k over 20y would be between £500pm-£700pm 10% would be 14-20 extra payments in the year.

katie4

getmore4less wrote: »

That is overpaying

not sure "which is 3 times monthly payment" means

on a £100k over 20y would be between £500pm-£700pm 10% would be 14-20 extra payments in the year.

Yes but we cannot afford 3x times our monthly payment so thought by keeping payments same as they are now and reducing the term it would be pretty much the same as overpaying

katie4

getmore4less wrote: »

That is overpaying

not sure "which is 3 times monthly payment" means

on a £100k over 20y would be between £500pm-£700pm 10% would be 14-20 extra payments in the year.

10% per annum is 3 times our monthly payment
our monthly payment is £360 so we can overpay by £1080 or more but we cant afford that all in one go

[Deleted User]

katie4 wrote: »

Yes but we cannot afford 3x times our monthly payment

You don't need to. The lender told you that you could make overpayments of UP TO 10%.

thriftylass

How much could you afford to pay a month? Even just rounding it up to 400 or 500 a month would make a difference and is well within your banks limits.

katie4

Deleted_User wrote: »

You don't need to. The lender told you that you could make overpayments of UP TO 10%.

10% per annum is three times the monthly payment (£1080 which we cant afford in one go)

Mahsroh

katie4 wrote: »

10% per annum is three times the monthly payment (£1080 which we cant afford in one go)

Yes, but it's UP TO 10%. You don't have to pay an extra £1080 a month. You can overpay by £1 a month if you want to, but you can't pay more than 10% of the balance.

[Deleted User]

katie4 wrote: »

10% per annum is three times the monthly payment (£1080 which we cant afford in one go)

Why are you taking an all or nothing approach to this?