Overpaying mortgage direct debit reduction by lender

Hi, I have a capital and interest mortgage and this month I’ve started as I mean to go on and paid an extra £300 off my mortgage capital, in addition to the fixed direct debit that goes out every month. 

(I checked and I can pay some 10% extra per year off the outstanding mortgage so I’m well within the repayment limits).

I subsequently received a letter from the lender, about a week later, telling me that my monthly direct debit payment would reduce by about £3 going forward to adjust for this overpayment. Presumably then they intend to reduce the direct debit further every month I make an overpayment.

Not having overpaid my mortgage before, I just wanted to check this is correct or usual practice? 

I had assumed the direct debit would stay the same.

By reducing the direct debit like this over time, is my lender preventing me from maximising my overpayments and paying off my mortgage earlier?

I know it’s only £3 per month or so, but I’d sooner they use this to pay off even more capital from the outstanding mortgage amount.

I appreciate any advice regarding this, many thanks in advance.


  • Poquito
    Poquito Posts: 34
    First Anniversary Name Dropper First Post
    Communicate with your lender… let them know your intention. They will adjust your dd back.

    They’ll always automatically just do what will make them the most money which is reduce your payment so they get max interest…
  • Thanks, I wondered if that was what they were up to!
  • DireEmblem
    DireEmblem Posts: 930
    First Post Name Dropper First Anniversary
    Just overpay an extra £3 next month, then £6 or whatever and so on!
  • South_coast
    South_coast Posts: 4,781
    First Anniversary First Post Name Dropper Photogenic
    You'll eat through your OP allowance much faster that way - better to keep the contractual payment where it was
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
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