Halifax Mortgage Advice
Discussion
We have a mortgage with the Halifax, and assuming they have fairly set terms on overpayments, wondered if anyone else could advise, without me having to arrange to see the bank. I'm very new to this and have no idea where to look! (I also don't trust that they would give us the best advice, and would give us the advice that gives them the best return)
I want to stick some money in ASAP, but want to know when is the best time to put money in. My partner was told that it's a 12 month rolling amount, so we'd need to be careful that we don't overpay by too much. We currently regularly overpay by £170 a month on a £120k mortgage (and can pay back 10% each year, or currently £12k).
What I don't want to do is lock our money into the mortgage but not see any benefit because of when the interest is calculated, for example. I'm also thinking to make it easier we should cancel the regular overpayments and just stick one lump sum in at a fixed point each year.
I'm not too sure what the best option would be, but it makes sense to start sticking some money in there right away, if it'll save us some money.
I want to stick some money in ASAP, but want to know when is the best time to put money in. My partner was told that it's a 12 month rolling amount, so we'd need to be careful that we don't overpay by too much. We currently regularly overpay by £170 a month on a £120k mortgage (and can pay back 10% each year, or currently £12k).
What I don't want to do is lock our money into the mortgage but not see any benefit because of when the interest is calculated, for example. I'm also thinking to make it easier we should cancel the regular overpayments and just stick one lump sum in at a fixed point each year.
I'm not too sure what the best option would be, but it makes sense to start sticking some money in there right away, if it'll save us some money.
You'll need to look at your terms of your contract to check when/howoften interest is calculated.
You currently overpay approx £2k a year so as long as you don't pay in more than an additional £10k this year and £9k next year etc etc you won't break the 10% max - also assume this to be a rolling year.
As for when, it depends on what rate you are currently paying. You might get a better raturn elsewhere for your money (if you are on a low fixed rate for example). I currently have one mortgage paying 0.99% - so I don't overpay that one as I can do better elsewhere.
When you come off your fixed rate you'll revert to the standard variable rate (currently 3.50% at Halifax I believe) - so as for remortgaging, depends if you can better that I guess.
You currently overpay approx £2k a year so as long as you don't pay in more than an additional £10k this year and £9k next year etc etc you won't break the 10% max - also assume this to be a rolling year.
As for when, it depends on what rate you are currently paying. You might get a better raturn elsewhere for your money (if you are on a low fixed rate for example). I currently have one mortgage paying 0.99% - so I don't overpay that one as I can do better elsewhere.
When you come off your fixed rate you'll revert to the standard variable rate (currently 3.50% at Halifax I believe) - so as for remortgaging, depends if you can better that I guess.
Your interest will almost certainly be calculated daily, therefore if you make a payment today, it will affect your mortgage balance immediately.
You will need to check your offer document to ensure this is the case. Look at section 11 on overpayments.
Whilst you've got the offer out, check that your early repayment charges expire at the same time as your current fixed rate. Again with H'fax they almost certainly will.
Assuming they do then you will be free to either
a: sit on the SVR.
b: remortgage to a new fixed deal with Halifax
c: remortgage to a more suitable deal with a different lender.
Halifax will allow you to apply for a new mortgage with them from 3 months before the expiry of your fixed rate. Although some lenders have remortgage offers that last 6 month's the majority will only do 3. So if you want to go for the whole market, I'd wait until July next year.
You can of course pay the ERC's to lock in a new rate at any time before this.
You will need to check your offer document to ensure this is the case. Look at section 11 on overpayments.
Whilst you've got the offer out, check that your early repayment charges expire at the same time as your current fixed rate. Again with H'fax they almost certainly will.
Assuming they do then you will be free to either
a: sit on the SVR.
b: remortgage to a new fixed deal with Halifax
c: remortgage to a more suitable deal with a different lender.
Halifax will allow you to apply for a new mortgage with them from 3 months before the expiry of your fixed rate. Although some lenders have remortgage offers that last 6 month's the majority will only do 3. So if you want to go for the whole market, I'd wait until July next year.
You can of course pay the ERC's to lock in a new rate at any time before this.
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