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    • Ryhs Moggy
    • By Ryhs Moggy 20th Oct 19, 6:23 PM
    • 14Posts
    • 2Thanks
    Ryhs Moggy
    Mortgage overpayments not reducing term!
    • #1
    • 20th Oct 19, 6:23 PM
    Mortgage overpayments not reducing term! 20th Oct 19 at 6:23 PM
    I have 2 barclays mortgages (one is for additional borrowing for loft conversion we did a few years ago) secured against my property and I make regular monthly overpayments on each account. These overpayments are shown on my annual mortgage statement but the end dates of the mortgages never seems to be brought forward. Therefore what is happening to my overpayments? I don't understand this because when I use the MSE Mortgage overpayment calculator it shows term is reduced by making one off and monthly overpayments, so why does my mortgage statement not reflect this? My monthly payments remain static and are not reducing. Should I get in touch with Barclays directly?
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    • Zero Sum
    • By Zero Sum 28th Oct 19, 7:15 AM
    • 1,397 Posts
    • 1,095 Thanks
    Zero Sum
    No-one is discussing the elephant in the room. By clearing the mortgages early I get an extra £1100 in my pocket each month from no longer paying it! Both mortgages will be clear (based on my current monthly overpayments) when I am aged 53, around 5 years from now.

    I thank you all for the excellent replies so far. I need to go and check the best savings accounts!
    Originally posted by Ryhs Moggy
    As sea shell says, its not what the mortgage is, more your net position then its just a matter of shuffling money between accounts.

    For example lets say you have a £50k mortgage & have £50k in cash.
    Your mortgage is 0.92% so you are being charged £460 a year in interest.
    But the instant access savings rate is 1.45% so you're earning £725 in interest.
    Now obviously you can get better rates tying money up for longer & with it being a mortgage you're only drip feeding so can put a chunk of that in staggered bonds on 1,2,3 etc years.

    The other thing worth mentioning is that paying off mortgage can actually have a negative effect on your credit rating if you have no debts. I paid off my last one & couldnt get a decent credit card for love nor money. New house & new mortgage ive now got several 0% ones for stoozing. Im now mortgage neutral & have no intention of paying it all off. Might drop it to £25k or something when my deal ends.
    • AngelOfTheNorthWest
    • By AngelOfTheNorthWest 1st Nov 19, 8:29 AM
    • 21 Posts
    • 2 Thanks
    If your interest rate on the mortgages is sub 1% then you can certainly make more money from putting the cash elsewhere. However there's also the psychological factor and personal preference. You have to know that you won't touch the money and some people do just prefer the feeling of knowing the mortgage is paid earlier and are willing to essentially be a bit worse off because of that. It sounds like you might be in that category. Nothing wrong with that, just make it an informed decision.
    • Ryhs Moggy
    • By Ryhs Moggy 27th Nov 19, 5:30 PM
    • 14 Posts
    • 2 Thanks
    Ryhs Moggy
    Thanks everyone, there is some really good advice in this whole thread for me to digest.
    • liamcov
    • By liamcov 28th Nov 19, 11:14 AM
    • 421 Posts
    • 357 Thanks
    I have been pulling my hair out with Barclays regarding o/p for a while now - having spoken to 2 call handlers and a branch visit to the 'mortgage specialist' my confidence in them is very low.

    Having been through that and doing my own research, I've found that if you make an o/p up to 3x your monthly payment, this is taken off the mortgage balance but the monthly payment stays the same (the result is your term will eventually be reduced as there is less to pay back).

    If you do an o/p over 3x your monthly payment, then they recalculate your monthly payment (ie. reduce it) and the term stays the same.

    I've never come across such a complex way of doing this, so not sure if this is common or unique to Barclays but they don't make it very clear (I had to explain to the 'mortgage specialist' their own rules!)
    • getmore4less
    • By getmore4less 28th Nov 19, 4:16 PM
    • 38,009 Posts
    • 23,582 Thanks
    Barclays gave me the option to keep the same payment and never reduce it no matter what happened to the rate or payment.
    • Thrugelmir
    • By Thrugelmir 28th Nov 19, 6:13 PM
    • 65,891 Posts
    • 58,018 Thanks

    I've never come across such a complex way of doing this, so not sure if this is common or unique to Barclays but they don't make it very clear (I had to explain to the 'mortgage specialist' their own rules!)
    Originally posted by liamcov
    Seems clear enough. Their business their rules. Will be an underlying reason behind this policy. Could simply be in reaction to previous customer interaction. A nononsense streamlined approach.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • Ryhs Moggy
    • By Ryhs Moggy 2nd Dec 19, 12:48 PM
    • 14 Posts
    • 2 Thanks
    Ryhs Moggy
    The problem with Barclays is their confusing terminology in their letters and online banking website. Awful company to be honest. They purposely make it very difficult to make overpayments in my opinion.
    • badmemory
    • By badmemory 2nd Dec 19, 7:32 PM
    • 2,927 Posts
    • 4,639 Thanks
    I think that paying off a mortgage can also have that "this roof is all mine" side, peace of mind really. Especially if there is likely to be any job/redundancy problem. In the 18 years since I have paid mine off I have never had any problem at all getting credit, bathroom 0%, car 0%, credit cards both doubled so I could if I was daft enough take all my annual income on them.
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