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Help understanding mortgage overpayment
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Debtfree40plus
Posts: 2 Newbie

Hope someone can help and see if I have understood my bank correctly today.
I received a letter from my lender advising that the interest rate is going up. We have been overpaying for some time and the letter says the monthly payment will go down because the amount by which we have overpaid is used to reduce it.
I rang our mortgage provider today to explain that we don't want the overpayments to be used to decrease monthly payments as we want to pay the mortgage off early (or have the option to underpay if needed). They said the only way round this is to just increase the amount we overpay by, to compensate for the reduction.
Is this right? Provider is Halifax if that makes any difference.
I received a letter from my lender advising that the interest rate is going up. We have been overpaying for some time and the letter says the monthly payment will go down because the amount by which we have overpaid is used to reduce it.
I rang our mortgage provider today to explain that we don't want the overpayments to be used to decrease monthly payments as we want to pay the mortgage off early (or have the option to underpay if needed). They said the only way round this is to just increase the amount we overpay by, to compensate for the reduction.
Is this right? Provider is Halifax if that makes any difference.
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Comments
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What you pay determines the actual real term.
The original term just decides the payment.
Most lenders have trigger events that recalculate the payment based on remaining original term.
Some(like Barclays) have options like never reduce only put up if needed.0 -
Yeah they did this to me on the annual review, problem been you can still only pay 10% of the account/ sub account bal a yearDon't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.0
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chanz4 said:Yeah they did this to me on the annual review, problem been you can still only pay 10% of the account/ sub account bal a yearOP, just increase your standard payments or make additional payments to make it back up to what you were paying before.0
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OP, assuming that you are on the variable rate is there any reason that you are not looking to remortgage and look for a better rate?0
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Mahsroh said:chanz4 said:Yeah they did this to me on the annual review, problem been you can still only pay 10% of the account/ sub account bal a yearOP, just increase your standard payments or make additional payments to make it back up to what you were paying before.Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.0
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chanz4 said:Mahsroh said:chanz4 said:Yeah they did this to me on the annual review, problem been you can still only pay 10% of the account/ sub account bal a yearOP, just increase your standard payments or make additional payments to make it back up to what you were paying before.
Plus as a former Halifax mortgage customer who was trapped on a variable rate for several years, I know they typically take around a month from a BoE rate change to notify their rates changes, which would be about now, so I would suspect that this is the case with the OP (i don't know for sure though, obviously).0 -
We normally get notified 3 months beforeDon't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.0
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We're on SVR so will just increase our overpayment to make up for the decrease. Got just over £7k left and just want to get it paid off. Thanks for the advice.1
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