Mortgage overpayment logic

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Today I confused Natwest with my questions about mortgage overpayments

They have two overpayment modes:
- Up to 999, the monthly payment stays the same
- 1000 or more, they recalculate the monthly payment

I don't want to have my monthly payment reduced, so I asked them: "What counts as an overpayment?".

If I were to define the term, an overpayment is anything above the monthly payment, whatever that may be, so if they reduce my payment, I lose out. For example, if my current payment is 750 and the whole lump sum paid at once would reduce my monthly payment to 650, if I wanted to keep paying 750 I'd be using my overpayment allowance by 100 each month. On the other hand, if I make the overpayment in 999 chunks, the monthly payment remains 750 and my allowance remains untouched.

The mortgage offer doesn't say anything clear beyond "allowed 10% of balance at the start of each year", and Natwest wrote me a nonsensical response which kind of made it sound that the 100 I'd like to pay on top of the reduced payment would not be eating my allowance.

Which one is right?

poppy10_2

You can make as many £999 overpayments as you like, without causing your monthly payments to be adjusted. Just do a bunch of payments on the same day to hit your twenty per cent threshold.

The limit was raised from 10% to 20% for new and existing customers last year, so ignore what it says in your mortgage offer

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I did notice that my allowance is quite a bit larger than a little while back on the overpayment page, and I wondered why. Thanks for confirming that it's not a computer error.