New mortgage product for 2023, making an overpayment now

Tulip15

Hello,

I can’t get my head around this scenario and would be grateful for some advice. 

I’ve just arranged a new mortgage deal for March ‘23 with my current provider as I wanted to get it done before any potential further rate rises. I am in a position to make a 10% overpayment this year and again at the start of next year before the switch formally occurs. Even though I’ve agreed to a certain monthly payment already based on current balance (before overpayments) will the reduced balance at the time of the switch (after the overpayments) be used to re-calculate the new monthly repayment amount on the new product or am I tied into the repayments on the higher balance now that I’ve signed up to the product early?   In other words will they re-calculate the monthly repayments based on the balance at the time of the switch? I’m already on the lowest LTV so no concerns there. 

Or should I have made the overpayments first and then sorted out a new product? 

I hope that’s clear but if not, please let me know and I’ll clarify.

Thank you. 

jrawle

I guess this will be treated the same as it would if you made an overpayment during the term of the new deal. The lender will either reduce the monthly payment, or reduce the term of the mortgage; which of the two will depend on the lender. Who is the lender? I know Nationwide, for example, allow you to choose whether overpayments reduce the monthly payment or term.