Halifax Overpayments

qtlc

Wonder if someone can help me?

My girlfriend and I took out a mortgage with Halifax last August for £130,000 over 30 years fixed at 5.59 for 2 years.

Our monthly payment is £742ish and we've started from this month to overpay via my Internet Banking to make it a flat £800 (which apparently should save us 5 years if we keep it up)

I wanted to check that the payment had been received OK so called Halifax and it had. Also wanted to check that our monthly payments will stay the same (at least until the fixed period ends).

She said the only time it may change is if the base rate changes. Despite us being on a fixed deal she says they recalculate all of their mortgages and as we have paid more than we should have done that our monthly may be changed to reflect this.

Is this normal? Is this so it keeps the term the same? Would the best answer just be to increase our overpayment by the amount it reduced?

JonnyBravo

qtlc wrote: »

Is this normal? Is this so it keeps the term the same? Would the best answer just be to increase our overpayment by the amount it reduced?

Not sure, dont have my mortgage there but as you say, just up the overpayment to keep the amount you are paying the same..... so long as you dont start to reach an amount where youd incur charges of course..... (youre a long way off that point, but at that point you'd just officially reduce the term to take account of it)

Noz

qtlc wrote: »

Is this normal? Is this so it keeps the term the same? Would the best answer just be to increase our overpayment by the amount it reduced?

Yep, that's how Halifax operate their mortgages.

You got the right idea, just increase the overpayment by the same amount of the reduction.

violetblue

I'm with the Halifax too, and this is just how they work. Whenever the interest rate changes, I get a letter telling me what my new monthly payment will be.

When I decided to start overpaying last year, I rang up to see if I could increase the monthly direct debit amount, and was told they could change it on their system to automatically round up to the nearest £100. I don't know if this is any use to you but it would save you having to send the overpayment manually every month.

autocasher

same here, i increase the overpayment whenever they pull this stunt with a base rate change - of course, its to increase your term back up again.

when i reach the point where my overpayments will break the 10% max overpayment per rolling year rule they operate (sometime next year at my current levels), i'll just get them to reduce the term itself for their one off £10 admin fee.

that way you can make sure you keep at the effective monthly payment level you want, and overcome their monthly payment reductions and overpayment limits.

qtlc

Thanks for the advice!
It worried me a bit as I've spent ages reading all the overpayment stories on here and noone seemed to mention it so thought i'd check.
Thanks everyone for the advice.
I'm going to set up a standing order for now, then it means we can change it whenever we want/need to.

One day I dream of being able to afford some of what people on here write about and clearing a mortgage in 10 or 15 years. This time next year Rodney... )