Monthly payment reducing because of overpayment 5 year fix

zenshi

I have 5 year fixed rate mortgage and made the 10% overpayment allowed. I called the provider to double check the 10% figure. All good.

he then said that my monthly payments would be reviewed at end of year one and recalculated. Is this normal? Not made an overpayment whilst in a fixed rate before.  I’d rather they left them as they are. Mortgage with Halifax

Hoenir

Be an automatic calculation that's performed to ensure that the mortgage is repaid in accordance with it's contractual term. All you need do is to continue to overpay within the permitted allowance. 

stuartp2000

Generally if you repay more than 1000 in a lump sum this counts as a capital repayment and the monthly repayment is amended to keep the end date of the mortgage as per the original contract.
If you make repayments of under 1000 then these are counted as interest payments and reduce the term not the monthly payment.

Depending on what you wanted to achieve influences how you make the over payment, so if you want to reduce term you make regular payments under 1000 rather than a bigger lump sum.

RelievedSheff

Yes Halifax do this every year and recalculate your payment.

We overpay monthly so just reset the direct debit every year to include the overpayment again.