Mortgage overpayment limits

saver2000saver2000 Forumite
92 Posts
Part of the Furniture 10 Posts Combo Breaker
Hi all,

I've been thinking of overpaying my mortgage early but I am a bit confused regarding the overpayment limits.

Eg. The overpayment limit on mine is 10% of the yearly balance, but how is this calculated? Is this the year from April to April? Or the month when I started the mortgage? Do they look at the year on a rolling basis, so every payment I make they check the balance from 12 months ago, then do the 10% check against that?

Surely as well, if I overpayed by a certain amount each month as time went on the 10% will become smaller so there is more of a chance of hitting the limit. Or do you have to recalculate each month and adjust overpayments to make sure you don't hit the limit?

Totally baffled by this, most mortgage calculators tell you how much you will save but no word on the limits. The one on this site lets you put in a yearly percentage but doesn't show how much I would pay each month or whether that would have to vary. (Although I doubt I could even hit the 10% in the first few years without doubling the payments)



  • LadyGnomeLadyGnome Forumite
    795 Posts
    Seventh Anniversary 500 Posts Name Dropper Combo Breaker
    Different mortgages have different ways of calculating it.  Who is your mortgage with?  You will need to check the details of the terms and conditions.  I think mine runs annually from the date of my last fix but is 10% of the original value (Nationw1de)
    Start Nov 2012 £310,000
    Jun 2022 £152,029.12
    Reduction £157,970.88

    End Sept 2034 (but I have a cunning plan...)
    2022 MFW #78 £6200/£12000
    MFiT-6 #28 £1870.38 /£75000
  • themadvixthemadvix Forumite
    5.7K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    With Santander it's calculated annually in January as 10% of the outstanding loan. If you log on to make an OP, it shows you exactly how much of the annual allowance you have left before you start paying ERCs.
  • edited 26 April at 9:10PM
    jimjamesjimjames Forumite
    15.9K Posts
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 26 April at 9:10PM
    As above it really depends on the bank so you'd need to check their T&Cs. Nationwide is based on the date the product was taken out so can reset if you move to a new fixed rate. The 10% is original balance too so can make a big difference in later years. 10% of £200k gives a lot more headroom than 10% of £20k! I guess for one that is based on reduced balance it would have to be the amount at start of year so you could calculate it.
    Remember the saying: if it looks too good to be true it almost certainly is.
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