Mortgage... Paying 10%... Original amount or...?

[Pulse]

So we're paying in 10% of our amount owed, but want to make sure we don't get charged, and not quite sure how to work it out. We don't want to get fined!

We have £119,000 owing, and have been paying £170 each month for the last year or so (so £2040). So by my reckoning, we can pay in just shy of £12,000 in total, so £10,000 today. Or is that wrong? Or does it go on the amount afterwards? I'm not sure, so want to make sure I do this right, whilst also making sure I have put the maximum I can possibly put in, in.

Anyone able to help?

ETA: It's a 12 month rolling.

[scotal]

Depends on your lender.
Not helpful I know, but call them.

[illmonkey]

It will usually be 10% OVER pay, i.e., it doesn't take normal payments into account. But as scotal says, call them. Everyone will be different.

[Pulse]

Cheers, that's OK then. I'm waiting to hear back from them, but wanted to do it today while I had time. They're not very responsive though, so we'll just have to wait until they call I guess!

[Pulse]

OK, after some chasing, she has said we can overpay by 10% of the original amount we were lent??? That doesn't sound right to me, but she's putting that in writing over email to me... So we've put in c.£1950 she says so far within the last 12 months, and we can also put another c.£11,500 in!

[illmonkey]

Humm, doesn't see right. I'm allowed to OVERPAY by 10% of the value. The monthly payment doesn't come into that figure.

[Gareth79]

When I've heard rules explained before it has most been up to 10% of the balance at the start of the year. The early redemption charge would be levied on any amount exceeding that. I did hear somebody having trouble with a lender and it turned out that the terms were very badly worded and it wasn't clear whether it was for the calendar year or the anniversary of the mortgage.

[Pulse]

illmonkey said:

Humm, doesn't see right. I'm allowed to OVERPAY by 10% of the value. The monthly payment doesn't come into that figure.

She has said it is calculated on the amount at the start of the financial year, apparently... I have no idea. I've gone on her advice anyway. She revised the figure due to a miscalculation to £10,999. So we've put in £10,000 instead, and if we get charged, we have the email confirming. I'll just keep calling her every 6 months and seeing what I can pay in, get her to email, and do it. Easiest way!

[Pulse]

Gareth79 said:

When I've heard rules explained before it has most been up to 10% of the balance at the start of the year. The early redemption charge would be levied on any amount exceeding that. I did hear somebody having trouble with a lender and it turned out that the terms were very badly worded and it wasn't clear whether it was for the calendar year or the anniversary of the mortgage.

Ah yes, it was this! Start of the year. Well, it'll be less next year then! Bye bye £10k.

[illmonkey]

Pulse said:

Ah yes, it was this! Start of the year. Well, it'll be less next year then! Bye bye £10k.

Hello better LTV and cheaper payments!

[vinnie83]

If you have any of your original mortgage paperwork, it should be stated in there.

I would take what that person said with a pinch of salt, and call either the advisor who arranged the mortgage for you, or call someone and ask the question again to see if you get the same answer.

Every product is different.