Mortgage overpayment

rigby44

Hi all,

I’m sure this has been asked many times, but I’ve searched the forum and can’t find anything.

For about 10 months or so we’ve been overpaying on our mortgage to the tune of about double.

I noticed the overpayment detail on my account recently and we’ve only been reducing the balance and keeping the term, as opposed to option 2) which is reduce the balance and term.

I’m worried that my overpayments haven’t been put to the best of use over these 10 months, and that I should have chosen balance and term. I guess I was worried that if I amended the term and couldn’t keep up the overpayments, then the bank would have increased the minimum amount I would have to pay monthly based on a shortening term.

Any light that can be shone would be much appreciated.

la531983

They wont readjust anything until you actually tell them to do so, you are still paying less interest.

I have been doing the same, my mortgage is due for a new rate in October, at which point I will ask them to take them into account and reduce the monthly payment.

la531983

They wont readjust anything until you actually tell them to do so, you are still paying less interest.

I have been doing the same, my mortgage is due for a new rate in October, at which point I will ask them to take them into account and reduce the monthly payment. Be aware asking them to reduce the term may result in them wanting to credit check you again.

rigby44

la531983 said:

They wont readjust anything until you actually tell them to do so, you are still paying less interest.

I have been doing the same, my mortgage is due for a new rate in October, at which point I will ask them to take them into account and reduce the monthly payment. Be aware asking them to reduce the term may result in them wanting to credit check you again.

I can see the additional payment coming off the capital balance though?

la531983

rigby44 said:

la531983 said:

They wont readjust anything until you actually tell them to do so, you are still paying less interest.

I have been doing the same, my mortgage is due for a new rate in October, at which point I will ask them to take them into account and reduce the monthly payment. Be aware asking them to reduce the term may result in them wanting to credit check you again.

I can see the additional payment coming off the capital balance though?

Well yes, so you are paying less interest. Unless your overpayments hit a certain threshold, which will differ by provider, they wont change the term or the minimum payment though. Until you ask them to.