How much can I overpay on my mortgage

William_Ferguson

Long story short, at the turn of the year, we had 141,000 GBP outstanding on our fixed rate mortgage with the Halifax. We made maximum 10% overpayment on this beginning of year before it expired in May. We then had it on the SVR for a month or so to allow us to make a further large overpayment bringing it down to an amount owed of approx. 94,000 GBP.


We then moved to a 5 year fixed rate (still with Halifax) and I made a further overpayment the other day of 2,000 GBP so its sitting at approx. 91,500 GBP. Question is, how much more can I overpay before I start having to pay the penalty fee? Whilst I was on the phone to them I did ask and I was told I was allowed to make overpayments of 10% of the amount owed at beginning of year (remember I already made a payment whilst still in the old mortgage). However, I phoned up another Halifax rep who said any further payment I made would be subject to penalty amount?


Which one might be correct?

D_M_E

You have to ask what do they mean by beginning of year - do they mean January 1st OR do they mean the year starts on the day the mortgaga was granted and taken out.

William_Ferguson

No, rep on the phone said from beginning of calendar year and that it did not matter if you switched product. This is why I called up again and got a different advisor who told me the exact opposite.


I personally think it would be a max 10% of when our new fixed rate started in August meaning approx. 9,400 GBP I could pay. Just wondered if any other posters had experience in this.

datlex

You might get better advise over on the mortgage free board.

D_M_E

If it's January 1st and based on the outstanding mortgage at that date then from your own figures you have already exceeded the 10% allowed for overpayments penalty free so you owe them a few bob on the overpaid amount - best to keep quiet until January 1st next year.

William_Ferguson

Got confirmation yesterday - the most I can overpay without penalty is 10% of the amount owed when the new fixed rate mortgage started on August 1st.


Therefore, will overpay the remainder of what I am allowed to pay today.

D_M_E

Well done, but did you get that in writing, as it seems to contradict what you have already been told.

Trouble is, the new mortgage could be seen as a continuation of the old, not as a new mortgage, but I agree the mortgage term should start on the day the morgage was granted, in your case 1st August, not the first day of the year.

System

Usually it's 10% of the remaining balance per year. It is in respect to Santander.