Barclays pre-payment balance

pieroabcd

Hi,
reading through Barclays web pages they say that with certain mortgages early repayments of less than three times the monthly installment go to a pre-payment balance, but it's not clear if the interests are caculated on the difference between the remaining capital and this pre-payment balance.
Does anyone have first hand experience with this?

More than 3x go toward a "part-repayment" that I interpret as a capital repayment.

Thanks.

mrsplinter

I've got a Barclays mortgage and have made overpayments. The main thing is any additional payment reduces your outstanding balance immediately. Interest is calculated daily and therefore you are charged less interest after the payment.

The difference is if the payment is less than three times your payment it does not count towards the 10% limit on overpayment and is held in a pre-payment balance which can be used to make underpayments or capital payments in the future. Your monthly payment remains the same.

If you make a payment over three times your monthly payment it is treated as a capital repayment and goes towards the 10% limit, your monthly payment is also recalculated.

pieroabcd

With

"The main thing is any additional payment reduces your outstanding balance immediately"

By balance do you .ean the capital?
Isn't the mortgage balance the sum of capital and interest?

Thanks

mrsplinter

Yes, the balance is the capital, the original amount I borrowed, and the interest I have been charged. The vast majority of the balance is actually the capital as the interest is always cleared every month with the monthly mortgage payment. The balance creeps up a few pounds a day between monthly payments reflecting the daily interest. So at the end of the month the day before my mortgage payment goes out the balance might be £91k left of the original amount borrowed plus £133 in interest.