Bank changing mortgage payments while fixed?

JamesO

BarelySentientAI said:

Newbie_John said:

Why not just save instead? 
If in let's say 10 years your savings match your remaining balance and your fix ends - pay it off in full (or during remortgage).

My mortgage is 4.4% and I put overpayment money into ISA 5.17%, gaining 0.77% of free money.

As the OP has said several times on the thread, savings have been considered and rejected due to other complexities.

Not rejected, I'd just need to discuss it with my ex (which is not the easiest thing in the world to do as her default response will be that I'm trying to cheat her in some way and it WILL involve 'drama')

Newbie_John said:

Ah ok I see it now, hidden within long replies.

Not 'hidden' - simply not particularly relevant to the question I was asking in the thread... 

jrawle

Would it be possible to provide some actual figures? How much are you overpaying by each month, and how much are Halifax proposing to reduce the monthly payment by?

JamesO

Mortgage is around £96k remaining. I've been overpaying 10% in Jan each year as a lump sum (paid ~£9.7k in Feb this year). Since the fix started, I've been paying ~£640 per month, so total repayments this year 'should' be in the region of £17k

No idea how much they intend to reduce my payments by as I've only just had the letter saying they're going to review and they've never done it before. Not even sure when it'll happen (if it's annual year, FY or a year from when the mortgage fix was taken out?) The letter doesn't say. 

RelievedSheff

They confirmed our new repayment amount on our annual mortgage statement.

jrawle

JamesO said:

Mortgage is around £96k remaining. I've been overpaying 10% in Jan each year as a lump sum (paid ~£9.7k in Feb this year). Since the fix started, I've been paying ~£640 per month, so total repayments this year 'should' be in the region of £17k

No idea how much they intend to reduce my payments by as I've only just had the letter saying they're going to review and they've never done it before. Not even sure when it'll happen (if it's annual year, FY or a year from when the mortgage fix was taken out?) The letter doesn't say. 

Maybe the review will decide that your current payment is OK and can stay the same.

It's hard to know what the new payment is likely to be without knowing the other details of your mortgage. But from a rough educated guesstimate, could be of the order of a £100 reduction per month. While it's annoying to pay £1200 less per year than you might have wanted, you will still be far better off as a result of your overpayment. When your fixed deal ends in 2027, you can choose to shorten your term to bring the monthly payment back up.

chanz4

they tend to reduce the paymetns by what your have overpaid over the remainder of the term

jrawle

chanz4 said:

they tend to reduce the paymetns by what your have overpaid over the remainder of the term

The point is that the "term" means the whole mortgage term, which may be 20 years, not the current fixed-rate deal, which will usually only be for a few years. The reduction in monthly payment during the fixed deal will be fairly small because the calculation is over the whole mortgage term; then you are free to reduce the term of the mortgage when choosing a new product, to bring the monthly payment back up again.

When I talked about a £100 reduction above, that was with the aid of the mortgage payment calculator, and an estimate of the remaining mortgage term and interest rate.