Mortgage overpayment limits
in Mortgage-Free Wannabe
3 replies 116 views
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)
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