Cannot overpay

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katie4
katie4 Posts: 430 Forumite
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Hi
i have enquired about overpaying on our mortgage and this was the reply based on your current product deal you cannot overpay but you can make capital payments of up to 10%PA which is 3 times monthly payment


So as our fixed term is ending soon we're looking at reducing the term from 20 to 15 years as overpaying doesnt seem to be an option, and reducing to 15 years will result in us continuing to pay the same monthyl amount we currently do, i know if we kept it at 20 years the monthly amount would reduce but if we cant afford to overpay what theyve suggested it seems to make sense to change to 15 years, i think?
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  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    katie4 wrote: »
    i know if we kept it at 20 years the monthly amount would reduce but if we cant afford to overpay what theyve suggested it seems to make sense to change to 15 years, i think?

    If you can't afford to overpay, I'd have thought leaving it at 20 years would be best, as 15 years will commit you to larger payments.
  • katie4
    katie4 Posts: 430 Forumite
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    Deleted_User wrote: »
    If you can't afford to overpay, I'd have thought leaving it at 20 years would be best, as 15 years will commit you to larger payments.


    the payments dont change from what we're paying now
    we pay £360pm now and reducing term to 15 years as we're due to change our rate in the next few months is £368 whereas 20 years its £280
    it makes sense to me to keep paying roughly what we are now
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    katie4 wrote: »
    Hi
    i have enquired about overpaying on our mortgage and this was the reply based on your current product deal you cannot overpay but you can make capital payments of up to 10%PA which is 3 times monthly payment


    So as our fixed term is ending soon we're looking at reducing the term from 20 to 15 years as overpaying doesnt seem to be an option, and reducing to 15 years will result in us continuing to pay the same monthyl amount we currently do, i know if we kept it at 20 years the monthly amount would reduce but if we cant afford to overpay what theyve suggested it seems to make sense to change to 15 years, i think?

    That is overpaying

    not sure "which is 3 times monthly payment" means

    on a £100k over 20y would be between £500pm-£700pm 10% would be 14-20 extra payments in the year.
  • katie4
    katie4 Posts: 430 Forumite
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    getmore4less wrote: »
    That is overpaying

    not sure "which is 3 times monthly payment" means

    on a £100k over 20y would be between £500pm-£700pm 10% would be 14-20 extra payments in the year.

    Yes but we cannot afford 3x times our monthly payment so thought by keeping payments same as they are now and reducing the term it would be pretty much the same as overpaying
  • katie4
    katie4 Posts: 430 Forumite
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    getmore4less wrote: »
    That is overpaying

    not sure "which is 3 times monthly payment" means

    on a £100k over 20y would be between £500pm-£700pm 10% would be 14-20 extra payments in the year.

    10% per annum is 3 times our monthly payment
    our monthly payment is £360 so we can overpay by £1080 or more but we cant afford that all in one go
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    katie4 wrote: »
    Yes but we cannot afford 3x times our monthly payment

    You don't need to. The lender told you that you could make overpayments of UP TO 10%.
  • thriftylass
    thriftylass Posts: 3,981 Forumite
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    How much could you afford to pay a month? Even just rounding it up to 400 or 500 a month would make a difference and is well within your banks limits.
    DEBT 09/23: CC 6347 5120, Other 1763 NSDs 0/20 Planned debt free date: Dec 2024
  • katie4
    katie4 Posts: 430 Forumite
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    Deleted_User wrote: »
    You don't need to. The lender told you that you could make overpayments of UP TO 10%.

    10% per annum is three times the monthly payment (£1080 which we cant afford in one go)
  • Mahsroh
    Mahsroh Posts: 769 Forumite
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    katie4 wrote: »
    10% per annum is three times the monthly payment (£1080 which we cant afford in one go)

    Yes, but it's UP TO 10%. You don't have to pay an extra £1080 a month. You can overpay by £1 a month if you want to, but you can't pay more than 10% of the balance.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    katie4 wrote: »
    10% per annum is three times the monthly payment (£1080 which we cant afford in one go)

    Why are you taking an all or nothing approach to this?
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