Mortgage query
Discussion
Morning all,
My mortgage is a tracker and has no limit on overpayments and no early redemption charge. If I make overpayments either on a monthly basis or as a lump sum once a year is it normal to have the option of reducing the loan period whilst maintaining the same payments or will the reduction in the capital owed result in lower monthly payments over the original loan term? I’m currently working abroad and am finding it difficult to get in touch with my mortgage provider to get clarification.
All the best
My mortgage is a tracker and has no limit on overpayments and no early redemption charge. If I make overpayments either on a monthly basis or as a lump sum once a year is it normal to have the option of reducing the loan period whilst maintaining the same payments or will the reduction in the capital owed result in lower monthly payments over the original loan term? I’m currently working abroad and am finding it difficult to get in touch with my mortgage provider to get clarification.
All the best
Depends on the terms and conditions. If you consistently overpay then of course the term will come down as you will clear the debt quicker.
My mortgage is a tracker too but the lender (Woolwich) only reviews your monthly payment vs balance once a year and if you have overpaid they automatically adjust the payment down to keep the loan term the same and make sure they get lots of interest. If yours is the same keep an eye out for that and increase your payments if the bank decrease them.
My mortgage is a tracker too but the lender (Woolwich) only reviews your monthly payment vs balance once a year and if you have overpaid they automatically adjust the payment down to keep the loan term the same and make sure they get lots of interest. If yours is the same keep an eye out for that and increase your payments if the bank decrease them.
Unfortunately all mortgages are different, but any payment changes would have to be discussed with the lender. You would need to read your terms and conditions or talk to your lender to find out exactly what the situation is.
Some mortgages take overpayments and offset them in a separate account that you can draw down from, some mortgages will take over payments off the balance, etc.
I might be wrong but if you wanted to pay a lump sum and reduce your payments it may be a case of refinancing the whole loan.
What are your objectives? Paying the loan off quicker or reducing your monthly commitment?
Some mortgages take overpayments and offset them in a separate account that you can draw down from, some mortgages will take over payments off the balance, etc.
I might be wrong but if you wanted to pay a lump sum and reduce your payments it may be a case of refinancing the whole loan.
What are your objectives? Paying the loan off quicker or reducing your monthly commitment?
My mortgage provider reduces my repayments unless I ask them to do otherwise. Whenever they send me a mortgage statement it includes words to the effect that they always set payments so the mortgage will be repayed in the contractual term and that I must let them know if I do not want my repayments reduced due to interest rate changes or reduction in the outstanding capital through overpayment.
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