How common are penalty free overpayment mortgages?

penguineater

How common are penalty free overpayment mortgages?

Usually they let you overpay 10% of remaining/total balance per year without a fee however i'd like to pay more than 10% without a fee.

Basing this question on normal mortgage times and not current covid hysteria!

getmore4less

Plenty about, always have been. 

Some lenders would need to be a tracker rather than a fix.

Some lenders(eg FD) have unlimited overpayments on all products

offset offer the equivalent of unlimited

billy2shots

I have a 10 year fix (8 years left) with First Direct at 2.4%. They allow unlimited overpayment. There is a charge for paying the whole lot off within the fixed term so if I was in a position to do that I would just leave a nominal amount in there to pay each month. 

penguineater

Thanks for the info both of you!

Hopefully the interest rates will be more favourable when it comes time to buy.

Thrugelmir

Downside of fee free is that base interest rate will be higher at the outset. As always crunch the numbers when selecting a product.  

Cscott139

You could always opt for an offset mortgage too where you can put as much as you want in the savings account and use that to reduce the balance you are charged interest on.

Bored

My nationwide tracker mortgage has no ERC and allows unlimited overpayments. It was slightly more expensive than fixing but I think the flexibility is worth it.

amnblog

More than 10% overpayment is an unusual request so get advice from a good broker before taking action. A Fixedproduct with a 20% allowance for example, is a total different proposition from an offset or tracker product.