Cannot overpay

enthusiasticsaver

katie4 wrote: »

what does it mean "you cannot overpay but you can make capital payments" ? whats the difference? thanks

Capital repayments are just lump sums off the mortgage that you want to overpay into the mortgage. You need to inform the bank or building society of this each time and let them know whether you want to reduce the term or the monthly payment.

Some lenders treat regular monthly overpayments as just interest paid up front and you wont see the benefit of lower interest overall until usually the mortgage year end.

katie4

i contacted mon bs and this is the reply


capital payments must be either 3 times payment or £1000 whichever is the greater. with a limit of 10% of the balance. For example you couldn't pay £10 as an overpayment


so it appears i cannot overpay just a few hundred

fewcloudy

katie4 wrote: »

i contacted mon bs and this is the reply


capital payments must be either 3 times payment or £1000 whichever is the greater. with a limit of 10% of the balance. For example you couldn't pay £10 as an overpayment


so it appears i cannot overpay just a few hundred

Wow...

Well I guess you just make the few hundred pounds overpayments into a separate account (or under the bed in a tin box for all the difference it makes), and once it add up to £1000 you make the capital repayment as per their rules.

ViolaLass

Have you check the original terms and conditions? I ask because what you've been told is unusual.