Is this right??

Lisselle

Hi
I currently have an interest only mortgage with Northern Rock for the next 17 years and 7 months. I am discounted until 1 jan 2011. I have contacted them today to ask if I can change this to a straight repayment mortgage as I have the ability now to overpay £60,000 of the current balance of £96,500, which will reduce the monthly payments to a manageable figure.

I have been told that this is very easy to do, I just send a cheque to them for £60,000 and then ask to change to a straight repayment based on the balance of £36,500. I can overpay at any point, any amount. There are no penalties to pay so long as I don't settle the mortgage before 1st Jan 2011 (i'm on a mission to be mortgage free in 5 years). I just have to pay £75 for the change over and £20 for the admin costs.

This seems incredibly easy so I thought i'd better check that i had heard correct. I did ask to adviser to repeat himself several times.

Any advice would be gratefully recieved

luckyfool

Northern Rock allowed unlimited overpayments on their Flexible Fixed Rates, so yes that does sound about right.

Alternatively, you could overpay the £60,000, and then setup a monthly overpayment for the balance over and above your normal monthly interest only payment. This could be done by standing order through your online banking (contact Northern Rock to get the correct account details and reference numbers for doing this). The benefit to this is that you get a "repayment" mortgage with extra flexibility and without paying Northern Rock £95 which they do not deserve.

Night-owl_6

Yes sounds about right