Mortgage overpayments not reducing term!

AngelOfTheNorthWest

If your interest rate on the mortgages is sub 1% then you can certainly make more money from putting the cash elsewhere. However there's also the psychological factor and personal preference. You have to know that you won't touch the money and some people do just prefer the feeling of knowing the mortgage is paid earlier and are willing to essentially be a bit worse off because of that. It sounds like you might be in that category. Nothing wrong with that, just make it an informed decision.

Ryhs_Moggy

Thanks everyone, there is some really good advice in this whole thread for me to digest.

liamcov

I have been pulling my hair out with Barclays regarding o/p for a while now - having spoken to 2 call handlers and a branch visit to the 'mortgage specialist' my confidence in them is very low.

Having been through that and doing my own research, I've found that if you make an o/p up to 3x your monthly payment, this is taken off the mortgage balance but the monthly payment stays the same (the result is your term will eventually be reduced as there is less to pay back).

If you do an o/p over 3x your monthly payment, then they recalculate your monthly payment (ie. reduce it) and the term stays the same.

I've never come across such a complex way of doing this, so not sure if this is common or unique to Barclays but they don't make it very clear (I had to explain to the 'mortgage specialist' their own rules!)

getmore4less

Barclays gave me the option to keep the same payment and never reduce it no matter what happened to the rate or payment.

Thrugelmir

liamcov wrote: »

I've never come across such a complex way of doing this, so not sure if this is common or unique to Barclays but they don't make it very clear (I had to explain to the 'mortgage specialist' their own rules!)

Seems clear enough. Their business their rules. Will be an underlying reason behind this policy. Could simply be in reaction to previous customer interaction. A nononsense streamlined approach.

Ryhs_Moggy

The problem with Barclays is their confusing terminology in their letters and online banking website. Awful company to be honest. They purposely make it very difficult to make overpayments in my opinion.

badmemory

I think that paying off a mortgage can also have that "this roof is all mine" side, peace of mind really. Especially if there is likely to be any job/redundancy problem. In the 18 years since I have paid mine off I have never had any problem at all getting credit, bathroom 0%, car 0%, credit cards both doubled so I could if I was daft enough take all my annual income on them.