Confusion about mortgage overpayment

59 Posts

Hi there,
I have overpaid my Halifax mortgage like a week ago but the monthly payment /the remaining term has not changed yet?
Do I need to call Halifax to adjust it? which one is better ? (reduced the payment or the term)?
Another questions please.
If I overpay say £5000 in Jan 23, can I ask Halifax for the amount back (underpayment) after I remortgage with them? or it is only allowed during the current fixed period term?
Thank
I have overpaid my Halifax mortgage like a week ago but the monthly payment /the remaining term has not changed yet?
Do I need to call Halifax to adjust it? which one is better ? (reduced the payment or the term)?
Another questions please.
If I overpay say £5000 in Jan 23, can I ask Halifax for the amount back (underpayment) after I remortgage with them? or it is only allowed during the current fixed period term?
Thank
0
Latest MSE News and Guides
Replies
If you normally pay say £1,000 a month you can ask for your payment to remain static while in the fix and this will reduce the term if you overpay
You can't normally ask for any overpayment back.
It reduces your debt and hence improves your LTV.
When you come to remortgage with your current lender or a new one how much equity you have built up and available mortgage rates will decide what deals are available to you.
You can of course keep back some of the money if you want
Thanks for the clarification.
- the monthly payment or term do not automatically change, the default is that they remain the same until the next natural change in rate (eg: end of fix) or when you call them and ask them to change it. I've only ever asked them to reduce the monthly payment keeping the term the same, so don't know how different it would be if you wanted to reduce the term.
- what is "better" will depend on your specific preferences. You can achieve the exact same interest rate savings by reducing the term (keeping the payments the same) or reducing the monthly payment (and continuing to overpay). My preference was the latter as I valued the flexibility, but it may be different for you.
https://blog.moneysavingexpert.com/2014/10/dont-shorten-your-mortgage-term-if-you-can-overpay/
I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
Please do not send PMs asking for one-to-one-advice, or representation.
((PS. Having read some of the feedback, it seems after overpaying, some lenders automatically decrease your normal payments. Of course this can help some with cashflow but it doesn’t have the interest and term reduction effect that this blog is about. So when you overpay, ask them to ensure your standard repayments remain the same))
That way you achieve the exact same result as reducing the term while retaining the flexibility to go down to the lower mandatory monthly payments if you had any cashflow issues, lost your job, went on mat leave, etc.
I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
Please do not send PMs asking for one-to-one-advice, or representation.