Overpayments on Barclays two part mortgage

Skylon

I recently ported my Barclays mortgage. I now have a two part loan as I needed to borrow more for the move. 

My plan was to overpay on the larger loan as that rate comes to an end sooner in June 2025.  I made my first overpayment this week and selected the larger account for it to go into, however on checking my account I noticed Barclays have split the payment between the two accounts. 

Does anyone else have a two part loan and know if this is normal, or is it possible to specify which account it goes into? 

jobdone1

Hi, I'm with ybs I have three parts to my mortgage I over pay the largest part of my mortgage. I discussed with ybs and agreed that the full amount goes towards part 2 the largest. Contact them and inform them you need the overpayment to go to one part only not both.

getmore4less

What rates are the part  the staring point is the one with the higher rate as that saves the most interest.

That get reviewed against longer term where those initial saving may be less than future saving when the rate changes..

Size of the part makes no difference

Thrugelmir

Skylon said:

Does anyone else have a two part loan and know if this is normal, or is it possible to specify which account it goes into? 

Have a chat with Barclays using webchat. 

Skylon

getmore4less said:

What rates are the part  the staring point is the one with the higher rate as that saves the most interest.

That get reviewed against longer term where those initial saving may be less than future saving when the rate changes..

Size of the part makes no difference

The part I was planning to overpay is £155,000 at 1.39% expiring in June 2025. The other part is £43,000 at 1.68% expiring February 2027. 

mrsplinter

Skylon said:

getmore4less said:

What rates are the part  the staring point is the one with the higher rate as that saves the most interest.

That get reviewed against longer term where those initial saving may be less than future saving when the rate changes..

Size of the part makes no difference

The part I was planning to overpay is £155,000 at 1.39% expiring in June 2025. The other part is £43,000 at 1.68% expiring February 2027. 

I have a Barclays mortgage in two parts and they treat overpayments differently than most banks. You can make capital payments of up to 10% each year without penalty. If you make a payment that is less than three times your monthly mortgage payment this is called a prepayment and not a capital payment so does not count towards the 10%. It is split between the two parts and a prepayment balance is created which reduces the interest, the prepayment balance can be used to make underpayments or capital payments. It works in your favour as part of your payment is reducing the interest on your more expensive interest rate now and you can still use it to make a capital repayment later. What you can do is when your deal expires in 2025, ring them up and ask them to take the amount in prepayment balance off the larger part of your mortgage.