Early redemption/repayment on part and part mortgage

I have a part and part ex Woolwich mortage with roughly the same amounts outstanding on repayment and interest only basis with four years to run.


I am in a fortunate poistion to pay off the repayment amount now and investments maturing in four years time to cover the interest only element. My thought is I can significantly reduce my monthly outgoings by paying off the repayment element in full ( I ahcve a career break planned)



I spoke to Barclays today who said that if I made a partial redemption ( i.e over three times usual CMP) it would be offset against the interest only element, and therefore the reduction in payment would be minimal. However if I made smaller prepayments this would reduce the repayment balance but not change the CMP ( though reduce the term).


The only way I can see to make this work is make a series of prepayments ( at less than 3x CMP) followed by a partial redemption ( greater than the CMP) to trigger a CMP recalculation.


Has anyone else had this situation? Barclays are admant I cant offset the partial redemption aginst the Repayment element only

Comments

  • Urbanshyne
    Urbanshyne Posts: 105
    First Anniversary Name Dropper First Post
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    What do the T&C's of your mortgage say in these circumstances?
    Neither a borrower or lender be; for loan oft loses both itself and friend.
  • wjat
    wjat Posts: 2 Newbie
    edited 18 October 2018 at 1:00PM
    Finally got this resolved with Barclays, their default is to allocate any'early redemption' against the interest only element of part and part mortages. However you can ask for this to be allocated against the repayment element instead .

    I managed to do this over the phone with them and I also needed to convert the early prepayments into a redemption - which also had to be reallocated against the repayment rather than intertest only element.

    CMP for the first month actually came out a credit to me, but following months look about right.

    I've still a small repayment balance that I will pay off when the current discounted term comes to an end early next year ( I've maxed out my 25% overpayment allowance forthis period). I presume I'll have to go through the same process to allocate this against repayment rather than interest only.
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