Best mortgage to Overpay

southantrim3 · 29 April 2009 at 12:25PM

Hi guys,

I'm currently with the Progressive Building Society and the only allow me to overpay by a maximum of 10% each year which doesn't give too much scope. Can you guys recommend a good mortgage that will let you overpay when and how much you want? Also one that has a reasonable interest rate and that wont screw you with charges.

Thanks for your help. :cool:

Peelerfart · 29 April 2009 at 3:42PM

Ever thought of an offset ?

JC383 · 29 April 2009 at 4:20PM

Nationwide will let you overpay by £500 per month without penalty

RosieTiger · 29 April 2009 at 7:47PM

Please read the advice on the mainwebsite, this is a major decision and you should try to arm yourself with the best knowledge you can.
Lots of mortages allow you to overpay - we have a tracker and are not limited, it doesn't have to be an offset.
There are numerous ways of doing this but you need to get the one that suits you best overall.

Dithering_Dad · 29 April 2009 at 7:56PM

I have an offset mortgage with Standard Life where I make overpayments directly onto my mortgage balance due to increased monthly premiums (I've left my monthly premiums at the same level despite the interest rate falls) and make larger overpayments into the offset, handy for when I might want some of them back!

It's a double whammy that really brings down that mortgage value fast.

dimbo61 · 29 April 2009 at 9:08PM

I have an offset fixed rate mortgage with YBS ( who have some good deals at the moment! )
Can offset my savings and other members of the family !!!
Found them to be a great mortgage lender with very good fees for there fixed rate deals
Check out the website ( I dont work for them )

southantrim3 · 30 April 2009 at 1:38PM

Dithering_Dad wrote: »

I have an offset mortgage with Standard Life where I make overpayments directly onto my mortgage balance due to increased monthly premiums (I've left my monthly premiums at the same level despite the interest rate falls) and make larger overpayments into the offset, handy for when I might want some of them back!

It's a double whammy that really brings down that mortgage value fast.

Thanks for the above Dithering Dad. Your idea sounds good and I like the double whammy idea. But I'm not quite getting it!! Can you break it down a bit more exactly what you do? Aprpeciate it

southantrim3 · 30 April 2009 at 1:45PM

Actually, just to give you guys a better idea of my circumstances, the following are the details of my current mortgage:

O/S Balance - £29372
Current Rate - 3.25%
Current monthly payment - £258.97
Estimated end date: July 2020
End date of current deal: 08/04/10
Early termination fee: £296.01

Again - appreciate the help guys.

blueberrypie · 30 April 2009 at 3:11PM

If you move to another lender before 08/04/10, you'll be charged the Early termination fee. After that date, you're free to overpay your current mortgage as much as you want. If you want to switch to another lender now, you need to work out how much it will save you (in interest) and how much it will cost you (early repayment charge, application fees, solicitor's fees, possibly valuation fees).

With a balance of £29k and an interest rate of 3.25%, you'd have to be overpaying by a lot over the next year to make it worthwhile switching now, I think.

StuartGMC · 30 April 2009 at 9:00PM

Blueberrypie makes a good point; with such a low balance you may be under some lenders minima for loans. You may consider an offset, take what they will offer as their minimum and then only use the amount needed for the mortgage.

Do think about an offset which includes your current account because it will represent a sizeable proportion of what you owe; typically then buy everything on a credit card that you pay off in full a day or two before due.

However you need to look at the complete thread on choices and look at the fees, although offsets often don't have an ERC.

Best wishes

southantrim3 · 1 May 2009 at 12:31PM

StuartGMC wrote: »

Blueberrypie makes a good point; with such a low balance you may be under some lenders minima for loans. You may consider an offset, take what they will offer as their minimum and then only use the amount needed for the mortgage.

Do think about an offset which includes your current account because it will represent a sizeable proportion of what you owe; typically then buy everything on a credit card that you pay off in full a day or two before due.

However you need to look at the complete thread on choices and look at the fees, although offsets often don't have an ERC.

Best wishes

Thanks for this, now I understand what Dithering Dad was trying to say. Is a very good idea. I think I'll go with Blueberry Pie's suggestion of staying with my current mortgage until the deal ends. Thanks guys - appreciate it. :beer:

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