Ulster Bank Overpayment

Jonnymccni

Hi All, 
Wondering if anyone can help me. I've an Ulster Bank Mortgage (seems similar to RBS terms) and wanted to make an overpayment to reduce the term of the mortgage. They have an online calculator which shows 2 options, one which reduces the term and one which reduces the monthly payment. You are allowed to pay £1000 per year without fees. However, when i called to pay, i was told that only the option that reduces the monthly payment was available. The first operator i spoke to said "yes the calculator is a bit misleading" the second said "the small print (which i cant find) tells you that you need a recalculation to reduce the term, and this isnt an option". 

This is my first mortgage and I'm wondering is this normal? Is there anything i can do to get them to accept apayment and reduce the term? I reckon i suppose i could wait until the fixed term is over and try and make a payment then, but I might spend it before then! I dont think its really worth while overpaying if they reduce the monthly payment, it doesnt save much interest that way and only reduces the payment by a few quid.

Any help appreciated.

Cheers, Jonny

MaryNB

I applied for my mortgage with Halifax last week and they said the same - it won't reduce the term. I'm planning to overpay during the fixed term and then reduce the length of the mortgage when I go to remortgage at the end of the fixed term. 

Jonnymccni

Yeah, I'm restricted to overpaying £1000 per year, but because they reduce the monthly payments it doesnt really make any difference. (It works out the equivalent of 1%, which I could make with savings and have easy access just in case). I think it will be better for me to save during the fixed term, and pay as much as I can at the end of the fixed term before negotiating the next deal.....