Mortgage overpayments - negative impact on mortgage application

mattwaylen · 5 July 2018 at 9:26AM

Hello All,

I have a question for the mortgage experts/Mortgage Advisers on here.
Can mortgage overpayments be seen as a negative when applying for a new mortgage?

I have been told that it could be seen as a financial commitment when applying.

My thinking was that they shouldn't as it is technically spare money and can demonstrate that any rise in interest rate is easily affordable.
However, my knowledge of mortgages is limited and I could be completely wrong!

My current monthly mortgage and overpayment as follows:
Mortgage £430
Overpayment £470

Any advice would be greatly appreciated.

Thanks
Matt

ACG · 5 July 2018 at 9:40AM

I cant think of any way it would be seen as a negative. Your monthly commitment amount will show on your mortgage statement and credit report, so it is easy enough to determine that you are overpaying.

But even if it were a commitment - would it not be going any way in place of the new mortgage? (ie the original mortgage paid off with the new one).

mattwaylen · 5 July 2018 at 10:14AM

Thanks for your reply.

As I mentioned in my original post, I am a novice when it comes to mortgages - only been through the process once as a first time buyer 6 years ago!

We are planning on moving to a bigger property in the near future and I was going to detox my finances before applying for a new mortgage.
One of the things I was going to stop was my regular overpayments and leave it as surplus in my bank account, but if this is not necessary I will leave it as it is.

Mortgage overpayments - negative impact on mortgage application

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