Overpayment on Mortgages

hrvoon

Hello

I’m a prospective FTB and wanting advice about overpayment so this maybe a really silly question because I’m new to it all

I know some mortgages offer overpayment under specific conditions etc. What I’m wondering is say I get a fixed term mortgage, when that term ends and I need to get a new mortgage is there a way to pay off a lump sum at that time and find a new mortgage for the difference? Does it work like that or am I just being idealistic?? :rotfl:

E.g 200k loan on 2yrs FT
Paid off 40k at end of FT
Can I pay off 20k and look for a new mortgage of 140k??

Thanks!!

spadoosh

Fixed periods typically come with early repayment charges. This is the aspect of 'overpaying' youre talking about. Ie you can choose to pay off the entirety or part of your mortgage at any time you want however depending on the nature of the agreement it might incur early repayment charges.

Once your fixed period is finished you are no longer bound by the early repayment charges, at this point you can settle the balance of your mortgage without penalty. Or make a lump sum payment.

So yes, once your fixed period is finished you can repay however much you want without penalty. You just tell your new mortgage provider the amount you want them to pay the old mortgage provider and then pay them your own bit too.