Barclays 'overpayments balance' mortgage

LondonColt

My wife and I are 4 years into a 35 year mortgage, which started at £240,999 at 2.99%. We've been overpaying for awhile now, both lump sum of 10% and monthly overpayment. I've just got our latest revised payment notice, as we've increased our overpayment again and I wanted to check my understanding of something.

The statement shows that our 'outstanding balance' is £193k and our 'overpayments balance' is £8k. Now I know that the monthly overpayments that are less than three times the minimum go into that balance, but I was wondering two things:

1) Can I ask for that £8k to be taken off the outstanding balance, and reduce that further to £185k and reduce the monthly repayment, rather than just reducing the interest?
2) If I do that, I assume the £8k will be counted against the 10% maximum overpayment I can make every year?

Barclays phone lines regularly have a 40-60 minute wait, so am hoping that someone here can answer!

K_S

LondonColt said:

My wife and I are 4 years into a 35 year mortgage, which started at £240,999 at 2.99%. We've been overpaying for awhile now, both lump sum of 10% and monthly overpayment. I've just got our latest revised payment notice, as we've increased our overpayment again and I wanted to check my understanding of something.

The statement shows that our 'outstanding balance' is £193k and our 'overpayments balance' is £8k. Now I know that the monthly overpayments that are less than three times the minimum go into that balance, but I was wondering two things:

1) Can I ask for that £8k to be taken off the outstanding balance, and reduce that further to £185k and reduce the monthly repayment, rather than just reducing the interest?
2) If I do that, I assume the £8k will be counted against the 10% maximum overpayment I can make every year?
Barclays phone lines regularly have a 40-60 minute wait, so am hoping that someone here can answer!

1) Yes. Unfortunately afaik there's no way to do it other than calling them or talking to them on web-chat from your online banking.

2) I would assume that the £8k has already counted against the 10% in the year that they were made. But probably best to ask Barclays to know for sure.

getmore4less

IME barclays apply the overpayment to the ballance, that is not an extra 8k sitting there doing nothing.

You will be able to work that out from the payments and statements.
If you don't know how post some details of the payments over the 4 years so far. 

getmore4less

without overpayments 4 years would be 

amount	rate	payment	owing
£240,999.00	2.99%	£926.14	£224,416.48

Putting aside any extra interest saved from the overpayments you have around £30k of overpayments. 

To get to the balance £193k with spread out payments that's around £620pm overpayment

Should be pretty obvious if the £8k is real separate amount or just an amount you can underpay by

LondonColt

getmore4less said:

IME barclays apply the overpayment to the ballance, that is not an extra 8k sitting there doing nothing.

You will be able to work that out from the payments and statements.
If you don't know how post some details of the payments over the 4 years so far. 

Yep, you are correct. I've done some maths and the £8k is already incorporated into the total amount owed. Thanks!

LondonColt

K_S said:

LondonColt said:

My wife and I are 4 years into a 35 year mortgage, which started at £240,999 at 2.99%. We've been overpaying for awhile now, both lump sum of 10% and monthly overpayment. I've just got our latest revised payment notice, as we've increased our overpayment again and I wanted to check my understanding of something.

The statement shows that our 'outstanding balance' is £193k and our 'overpayments balance' is £8k. Now I know that the monthly overpayments that are less than three times the minimum go into that balance, but I was wondering two things:

1) Can I ask for that £8k to be taken off the outstanding balance, and reduce that further to £185k and reduce the monthly repayment, rather than just reducing the interest?
2) If I do that, I assume the £8k will be counted against the 10% maximum overpayment I can make every year?
Barclays phone lines regularly have a 40-60 minute wait, so am hoping that someone here can answer!

1) Yes. Unfortunately afaik there's no way to do it other than calling them or talking to them on web-chat from your online banking.

2) I would assume that the £8k has already counted against the 10% in the year that they were made. But probably best to ask Barclays to know for sure.

Thank you. Barclays actually calculate the monthly overpayment and 10% separately. We overpaid the maximum 10% in a lump sum last year, and were still allowed to make monthly overpayments as well. I checked this about 4 times on the phone because I sort of couldn't believe it either, but it means you can effectively overpay 3x the minimum every month AND 10% in a lump sum if you have the cash to spare.

I suspect that if I ask to use the £8k to reduce the minimum payment, then they WILL count that towards the 10% but that's fine as we can just knock that off the amount we have aside to pay off the lump sum anyway.

Will get on the phone to them!

K_S

LondonColt said:

K_S said:

LondonColt said:

My wife and I are 4 years into a 35 year mortgage, which started at £240,999 at 2.99%. We've been overpaying for awhile now, both lump sum of 10% and monthly overpayment. I've just got our latest revised payment notice, as we've increased our overpayment again and I wanted to check my understanding of something.

The statement shows that our 'outstanding balance' is £193k and our 'overpayments balance' is £8k. Now I know that the monthly overpayments that are less than three times the minimum go into that balance, but I was wondering two things:

1) Can I ask for that £8k to be taken off the outstanding balance, and reduce that further to £185k and reduce the monthly repayment, rather than just reducing the interest?
2) If I do that, I assume the £8k will be counted against the 10% maximum overpayment I can make every year?
Barclays phone lines regularly have a 40-60 minute wait, so am hoping that someone here can answer!

1) Yes. Unfortunately afaik there's no way to do it other than calling them or talking to them on web-chat from your online banking.

2) I would assume that the £8k has already counted against the 10% in the year that they were made. But probably best to ask Barclays to know for sure.

Thank you. Barclays actually calculate the monthly overpayment and 10% separately. We overpaid the maximum 10% in a lump sum last year, and were still allowed to make monthly overpayments as well. I checked this about 4 times on the phone because I sort of couldn't believe it either, but it means you can effectively overpay 3x the minimum every month AND 10% in a lump sum if you have the cash to spare.

@londoncolt I wasn't aware of that, really good to know! Thanks for sharing.

getmore4less

LondonColt said:

K_S said:

LondonColt said:

My wife and I are 4 years into a 35 year mortgage, which started at £240,999 at 2.99%. We've been overpaying for awhile now, both lump sum of 10% and monthly overpayment. I've just got our latest revised payment notice, as we've increased our overpayment again and I wanted to check my understanding of something.

The statement shows that our 'outstanding balance' is £193k and our 'overpayments balance' is £8k. Now I know that the monthly overpayments that are less than three times the minimum go into that balance, but I was wondering two things:

1) Can I ask for that £8k to be taken off the outstanding balance, and reduce that further to £185k and reduce the monthly repayment, rather than just reducing the interest?
2) If I do that, I assume the £8k will be counted against the 10% maximum overpayment I can make every year?
Barclays phone lines regularly have a 40-60 minute wait, so am hoping that someone here can answer!

1) Yes. Unfortunately afaik there's no way to do it other than calling them or talking to them on web-chat from your online banking.

2) I would assume that the £8k has already counted against the 10% in the year that they were made. But probably best to ask Barclays to know for sure.

Thank you. Barclays actually calculate the monthly overpayment and 10% separately. We overpaid the maximum 10% in a lump sum last year, and were still allowed to make monthly overpayments as well. I checked this about 4 times on the phone because I sort of couldn't believe it either, but it means you can effectively overpay 3x the minimum every month AND 10% in a lump sum if you have the cash to spare.

I suspect that if I ask to use the £8k to reduce the minimum payment, then they WILL count that towards the 10% but that's fine as we can just knock that off the amount we have aside to pay off the lump sum anyway.

Will get on the phone to them!

Can't see the point of doing that, it is already off the capital and saving interest which is what matters.

I suspect is just sitting there as a pot you can call on if you want to reduce the regular payment handy to have as a reserve.

If that is the case then that is worth knowing as some lenders have removed that option.

I think the overpayment upto 3x does not count as part of the 10% has come up before very usefull for people that can hit the 10% limits.. 

LondonColt

No problem, I should stress that I don't know how they treat payments that are *exactly* three times the minimum as the website refers to 'under three times' and 'over three times'. So if your minimum is £600, best to keep your monthly overpayment to a total of £1799 or less to be on the safe side.

LondonColt

getmore4less said:

LondonColt said:

K_S said:

LondonColt said:

My wife and I are 4 years into a 35 year mortgage, which started at £240,999 at 2.99%. We've been overpaying for awhile now, both lump sum of 10% and monthly overpayment. I've just got our latest revised payment notice, as we've increased our overpayment again and I wanted to check my understanding of something.

The statement shows that our 'outstanding balance' is £193k and our 'overpayments balance' is £8k. Now I know that the monthly overpayments that are less than three times the minimum go into that balance, but I was wondering two things:

1) Can I ask for that £8k to be taken off the outstanding balance, and reduce that further to £185k and reduce the monthly repayment, rather than just reducing the interest?
2) If I do that, I assume the £8k will be counted against the 10% maximum overpayment I can make every year?
Barclays phone lines regularly have a 40-60 minute wait, so am hoping that someone here can answer!

1) Yes. Unfortunately afaik there's no way to do it other than calling them or talking to them on web-chat from your online banking.

2) I would assume that the £8k has already counted against the 10% in the year that they were made. But probably best to ask Barclays to know for sure.

Thank you. Barclays actually calculate the monthly overpayment and 10% separately. We overpaid the maximum 10% in a lump sum last year, and were still allowed to make monthly overpayments as well. I checked this about 4 times on the phone because I sort of couldn't believe it either, but it means you can effectively overpay 3x the minimum every month AND 10% in a lump sum if you have the cash to spare.

I suspect that if I ask to use the £8k to reduce the minimum payment, then they WILL count that towards the 10% but that's fine as we can just knock that off the amount we have aside to pay off the lump sum anyway.

Will get on the phone to them!

Can't see the point of doing that, it is already off the capital and saving interest which is what matters.

I suspect is just sitting there as a pot you can call on if you want to reduce the regular payment handy to have as a reserve.

If that is the case then that is worth knowing as some lenders have removed that option.

I think the overpayment upto 3x does not count as part of the 10% has come up before very usefull for people that can hit the 10% limits.. 

But them taking is as a lump sum would reduce the monthly payment, which the monthly overpayment balance doesn't so that would be a benefit?

I'm happy to update once I have spoken to them

getmore4less

Only if you want a smaller payment 

Not something those that are overpaying usually need to do.

IF that £8k is a pot you can draw on that is more flexible than the  ~£30pm reduction in payment