Stopping overpayments

jrawle

ManekiNeko said:

As you'll be making quite large overpayments, just check with your lender first that you'll be within your repayment limit for the year. For most mortgages, that's 10 per cent of the outstanding balance (not the original amount borrowed, unless you're in your first year).

With Nationwide, it's usually 10% of the original amount, even if you've switched deal with them several times.

Sncjw

ManekiNeko said:

As you'll be making quite large overpayments, just check with your lender first that you'll be within your repayment limit for the year. For most mortgages, that's 10 per cent of the outstanding balance (not the original amount borrowed, unless you're in your first year).

There can be big financial penalties for getting this wrong, so it's worth checking.

Also, do consider your mortgage rate vs. the best savings rate you can get - e.g. if you're still on a 2 per cent fixed rate, but you can get 5 per cent on your savings, you should probably sock the money away in savings instead, and just do one overpayment a year to maximise your interest. Ofc, this only applies if you've the financial discipline not to touch it.

Also also - do make sure you've got a tidy emergency fund saved up first, ideally, or at least that you'll be starting one alongside your OPs.

Best of luck.

Hi 

I can over pay up to 10 percent which would be 7530 a year so I am under that amount for doing 620 a month. 

I want to oveerpay the mortgage to bring the term down and also help with the LTV when I come to switch to a new deal.

ManekiNeko

Oki cool. It sounds like my lender is different to yours - they include my regular monthly mortgage payments within the 10 per cent allowance, so I need to deduct them first when working out what I can OP. I plan to call my lender once a year to get the updated figure I can pay in each year.

Sncjw

ManekiNeko said:

Oki cool. It sounds like my lender is different to yours - they include my regular monthly mortgage payments within the 10 per cent allowance, so I need to deduct them first when working out what I can OP. I plan to call my lender once a year to get the updated figure I can pay in each year.

Surely they shouldn't include your contractual amount as the 10 percent overpayment is over paying your contractual amount 

Sistergold

Sncjw said:

Yeah but I know I have the money to pay it. It wasn't the question of payingbit a different way it was more can I stop the regular payments if I need to. I'd rather it be taken automatically than me having to remember each month to do it 

You can amend or cancel overpayments but you can not stop your regular/monthly mortgage payment just because you previously made overpayments. Basically even though you said you want to make overpayments for x months it does not mean you are now tied to it, you can cancel. They do ask how long you want to set up overpayments in which case you say for x period or indefinite either way no penalty for changing your mind. Overpayments do not entitle you to payment holidays that’s a different arrangement altogether. Hope that helps? 

Sncjw

Sistergold said:

Sncjw said:

Yeah but I know I have the money to pay it. It wasn't the question of payingbit a different way it was more can I stop the regular payments if I need to. I'd rather it be taken automatically than me having to remember each month to do it 

You can amend or cancel overpayments but you can not stop your regular/monthly mortgage payment just because you previously made overpayments. Basically even though you said you want to make overpayments for x months it does not mean you are now tied to it, you can cancel. They do ask how long you want to set up overpayments in which case you say for x period or indefinite either way no penalty for changing your mind. Overpayments do not entitle you to payment holidays that’s a different arrangement altogether. Hope that helps? 

Yeah that's great. Don't think we will be doing mortgage holidays at all..also I am aware I will still be paying the contractual amount. 
.just want to try and make a dent in the mortgage term while I can.