Kensington Mortgage Overpayments

DthenG

Hi all...


Me & my partner recently got a FTB mortgage with Kensington back in March this year, and now that everything has settled down we're considering making overpayments on our mortgage as opposed to putting it in a savings accounts (high interest mortgage vs low interest savings). The overpayments we're looking to make is £300ish a month.



I've checked my offer/illustration & it doesn't seem clear what overpayments I can make...this is a segment from the offer


'If you make an overpayment of, or a series of overpayments that amount to, less than £5,000 unless we agree otherwise we will not apply this to reduce your loan balance but it will reduce the amount of interest you have to pay straight away.'


I find it strange that it says overpayments WILL NOT be applied to reduce the loan balance...I'm new to mortgages so it might just be me being naive. If they won't be applied to the balance/capital, where will the overpayments go & how will they be treated?


My broker also says this is very unclear & advised contacting Kensington for clarity, which I have done but my mortgage offer wasn't scanned into their system for them to check so they're calling back, so I thought in the meantime I'd ask you guys!


Thanks in advance for your help!

ACG

As far as I am aware Kensington do not allow overpayments - but it has been 2 years since I used them.

Your broker should be checking this with you.

But if it is not going towards your balance, it just means they will reduce your payments.

obay

Kensington do allow overpayments for every £5000 you pay into the account you can ask for a reduction on the monthly payment. They will let you know how much it is 5 days after you ask them.

I’ve done 1 and come down £33. I won’t be able to do it again as we’re moving banks now.

DthenG

Thanks for the replies guys!


I received a reply from Kensington - I can make as many overpayments via bank transfer as I like without charge & it'll sit on my account as a credit & reduce interest unless I tell them otherwise.



When I eventually remortgage away from Kensington these overpayments will be taken off my overall balance. I don't see why they're not taking off the balance anyway but hey ho!

obay

DthenG wrote: »

Thanks for the replies guys!


I received a reply from Kensington - I can make as many overpayments via bank transfer as I like without charge & it'll sit on my account as a credit & reduce interest unless I tell them otherwise.



When I eventually remortgage away from Kensington these overpayments will be taken off my overall balance. I don't see why they're not taking off the balance anyway but hey ho!

This is what we're doing now.

Have you signed up for the online portal? Because you can make card payments also there! Instead of setting up a standing order.