Overpayment help

wildhorses

Hi

Earlier this year I paid a lump sum towards my mortgage, expecting that this would help to reduce the term thus saving on interest. However, I've received a letter from my mortgage lender saying that due to the overpayment, my monthly repayments going forward will be reduced. This is not what I wanted so I gave them a call and they said they will need to do an affordability check if I wish to reduce the term.

So my question is, can I just overpay and avoid going through an affordability check? Will this have the same effect with regards to reducing the term and saving on interest? I'm sorry I know this should be clear and obvious and I've read through MSE's guide on this but I'm struggling to get my head around it all so any advice would be appreciated. Thanks in advance

EnterUserName

In my experience, if you ask to change the term (even if you ask to extend it), they will ask for an affordability check.

I'm in a fixed rate, and if I overpay, I am presented with two options - reduce the monthly repayments and keep the same term, or reduce the overall term and keep the same monthly payments.

I imagine you need to tell them which you want when you make the overpayment.

Also check if you have an overpayment allowance each year - mine is 10% and if I were to go over it (fat chance!), I'd get clobbered with a slice of early repayment charge on the overpayment in excess of the allowance.