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Overpayments on a mortgage

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Groomyd
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Re: Overpayments on a mortgage

Post by Groomyd »

el_pappje wrote: You have got a pearler of a deal - not as simple for others though given the current environment. Savings accounts rates need to be adjusted for the amount of tax you pay on them when comparing the tradeoff of saving vs. paying more on the mortgage. Works for some but not others.
If your mortgage is over 2% (ish) then it probably makes sense to over pay rather than save

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Re: Overpayments on a mortgage

Post by Knulpuk »

sted wrote:
stuboy wrote:Is this really becoming a MMIBTYM thread?
I thought the same.

I love the "I was first to gamble on a tracker when rates where (sic) over 5%"

btw...I got a better rate than you Groomy (0.8%)....but I don't like to talk about it (apart from at dinner parties). :lol:
0.78%

I win

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Re: Overpayments on a mortgage

Post by murf »

1.5%

Not winning but still happy. Bit like finishing top 100 in TFF. That'll do for me Tommy. :grin:

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Re: Overpayments on a mortgage

Post by dingram041 »

Just wanted to say thanks to Stuboy for starting this thread, made regular overpayments since April to my additional borrowing and will pay it off over 9.5 years early saving me £££££ in interest. Without it, I'd have still owed roughly £18k at end of this year, now I will be on for £12k. Thanks Sb for giving me the thought!

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Re: Overpayments on a mortgage

Post by Striker »

Shaggy365 wrote:Almost got stung right at the very end. The building society wanted to charge me £25/year for holding on to the deeds, or I could get it free if I bought house insurance from them. In the end I asked for the deeds to be sent to my local branch who didn't realise they were supposed to charge me.
In 2000 I was due to finish paying off a mortgage but the company offered to continue holding the deeds for free, if I left a small sum outstanding. They also don't charge for outstanding sums of £25 or less, so 13 years later I still owe them £25. If they change their conditions I'll be taking appropriate action before those conditions come into force.

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Re: Overpayments on a mortgage

Post by stevejtr »

We paid off the mortgage on MrsJtr's old flat a couple of years ago. Halifax said that since they've digitised the deeds there was no charge for holding them.

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Re: Overpayments on a mortgage

Post by dingram041 »

dingram041 wrote:
Just wanted to say thanks to Stuboy for starting this thread, made regular overpayments since April to my additional borrowing and will pay it off over 9.5 years early saving me £££££ in interest. Without it, I'd have still owed roughly £18k at end of this year, now I will be on for £12k. Thanks Sb for giving me the thought!


Since the last quote on September 8th 2013, put everything I've had in on overpaying and religiously overpaid every month so now down to £4,300 left, so on for what I quoted (8 months left) as right of now, have 10 years, 2 months left....would have even paid it off by now, but had to buy another car (£4,000)

I wrote down my overpayments from Sepember 2013 and is as follows:

March, April and May 2014 was paying for the car, so didnt put in very much then and paid off the car within those 3 months.

End of Sept £500
End of Oct £500
End of Nov £500
End of Dec £50
Mid of Jan £450
End of Jan £200
Middle of Feb £590
End of Feb £140
End of March £80
End of April £80
End of May £80
End of Jun £480
End of July £1000
End of August £600
End of September £500
End of October £700
End of November £1350
Mid January £1000

I'm chuffed but has been hard. The last 18 months, I've also been so fortunate gambling and religiously walked away with a profit.

The additional borrowing monthly payment with my normal mortgage payment combined was £722, now it's down to £596....will be down to £550 once the £4,400 has gone....cheers again SB!
Last edited by dingram041 on 21 Jan 2015, 19:50, edited 1 time in total.

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Re: Overpayments on a mortgage

Post by Surprised »

I'm going to have to do this.

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Re: Overpayments on a mortgage

Post by bluenosey »

Surprised wrote:I'm going to have to do this.
It's definitely the way forward. Find any mortgage payment chart and factor in a monthly overpayment and the overall saving is well worth it.

Also, Barclays now have a 2.99% 10 year mortgage. This could be the tip of the iceberg and a chance to lock in (Cost is £999 to Barclays customers only)

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Re: Overpayments on a mortgage

Post by Surprised »

bluenosey wrote:
Surprised wrote:I'm going to have to do this.
It's definitely the way forward. Find any mortgage payment chart and factor in a monthly overpayment and the overall saving is well worth it.

Also, Barclays now have a 2.99% 10 year mortgage. This could be the tip of the iceberg and a chance to lock in (Cost is £999 to Barclays customers only)

My mortgage is only about 260 quid a month as they just reduced the rate on part of it to 3.6% for 10 years.

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Re: Overpayments on a mortgage

Post by dingram041 »

A bit more info as wrote down every month on what is left from end of October 2013.

£64184
£14277 - £500 = £13777
£13208.61 as of 29th October

as of 20 November
£63414
£13111

as of 17 December
£63003
£12525 - £50 = £12475

as of 16 January
£63168.25 - £550 = £62618
£12526.07 - £133 = £12383 - £450 = £11933

as of 31 January
£62618
£11933 - £200 = £11733

as of 13 February
£62766
£11788 - £590 = £11198

as of 17 February
£62780 - £550 = £62230
£11200 - £130 = £11070 - £80 = £10990

As of 25th March
£61875
£10863 - £80 = £10783
Car £3000

As of 22nd April
£61471
£10702 - £80 = £10622
Car £1300

As of 19th May
£61061
£10538
Car £500

As of 18th Jun
£60665
£10459 - £480 = £9979

As of 17th Jul
£60264
£9897 - £1000 = £8897

As of 20th August
£59886
£8841 - £600 = £8241

As of 17th September
£59478
£8172 - £500 = £7672

As of 31st October
£59098
£7635 - £700 = £6935

As of 18th November
£58688
£6848 - £850 = £5998 - £500 = £5498

As of 20 December
£58286
£5443 - £1000 = £4443 = £62729

As of 19th January
£57893
£4410 = £62303

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Re: Overpayments on a mortgage

Post by Ashers »

It's the way to go, I took out a mortgage for £135,000 in August 2006 and have overpaid by around £450 per month. Mortgage is now down to £79,000.

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Re: Overpayments on a mortgage

Post by Backlash »

How much have you saved in £ by paying this off early?.
I'm (we) are in a mortgage where we can only over pay by 10%, would it be worth seeking a mortgage where overpayment is unrestricted?
bearing in mind we still owe around £230,000 :shock:

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Re: Overpayments on a mortgage

Post by Zimmerman »

dingram041 wrote:dingram041 wrote:
Just wanted to say thanks to Stuboy for starting this thread, made regular overpayments since April to my additional borrowing and will pay it off over 9.5 years early saving me £££££ in interest. Without it, I'd have still owed roughly £18k at end of this year, now I will be on for £12k. Thanks Sb for giving me the thought!


Since the last quote on September 8th 2013, put everything I've had in on overpaying and religiously overpaid every month so now down to £4,300 left, so on for what I quoted (8 months left) as right of now, have 10 years, 2 months left....would have even paid it off by now, but had to buy another car (£4,000)

I wrote down my overpayments from Sepember 2013 and is as follows:

March, April and May 2014 was paying for the car, so didnt put in very much then and paid off the car within those 3 months.

End of Sept £500
End of Oct £500
End of Nov £500
End of Dec £50
Mid of Jan £450
End of Jan £200
Middle of Feb £590
End of Feb £140
End of March £80
End of April £80
End of May £80
End of Jun £480
End of July £1000
End of August £600
End of September £500
End of October £700
End of November £1350
Mid January £1000

I'm chuffed but has been hard. The last 18 months, I've also been so fortunate gambling and religiously walked away with a profit.

The additional borrowing monthly payment with my normal mortgage payment combined was £722, now it's down to £596....will be down to £550 once the £4,400 has gone....cheers again SB!
Surely the trick is reducing the term and keeping your payment amounts the same.
Knocking months/years off your mortgage is so much more rewarding :)

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Re: Overpayments on a mortgage

Post by Zimmerman »

Backlash wrote:How much have you saved in £ by paying this off early?.
I'm (we) are in a mortgage where we can only over pay by 10%, would it be worth seeking a mortgage where overpayment is unrestricted?
bearing in mind we still owe around £230,000 :shock:
Are you likely to have more than 23k to pay back over and above your repayments?
If not, don't worry about it until it's time to renew.

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Re: Overpayments on a mortgage

Post by Backlash »

Zimmerman wrote:
Backlash wrote:How much have you saved in £ by paying this off early?.
I'm (we) are in a mortgage where we can only over pay by 10%, would it be worth seeking a mortgage where overpayment is unrestricted?
bearing in mind we still owe around £230,000 :shock:
Are you likely to have more than 23k to pay back over and above your repayments?
If not, don't worry about it until it's time to renew.
Renewal is in 2 months, I've been paying 10% more for the last 8 months(extra £110 per month) but I was just wondering if any knew if I overpayed by 20% -50% what the term reduces by or the amount you save.

My mortgage company won't give me such knowledge (the gits)

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Re: Overpayments on a mortgage

Post by Zimmerman »

Massive saving. Pay as much as you can as quickly as you can.

Is the limit 10% per month or per 12 month?
And it's usually 10% of balance rather than repayment amount (but I'm no expert).

ie if you could, pay £500 off or £1000 (or whatever you've got). Dont pay it monthly (finances permitting of course).

If your renewing, the option of one that doesn't have a limit on repayment is definitely preferable, but ultimately that's offset by rates and fees on offer.

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Re: Overpayments on a mortgage

Post by Ashers »

Backlash, who is your mortgage with?

I have worked in this industry for 14 years and have plenty of contacts that could help you.

Zimmerman is right though, it is normally a % of your balance in overpayments.

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Re: Overpayments on a mortgage

Post by el_pappje »

Backlash wrote:
Zimmerman wrote:
Backlash wrote:How much have you saved in £ by paying this off early?.
I'm (we) are in a mortgage where we can only over pay by 10%, would it be worth seeking a mortgage where overpayment is unrestricted?
bearing in mind we still owe around £230,000 :shock:
Are you likely to have more than 23k to pay back over and above your repayments?
If not, don't worry about it until it's time to renew.
Renewal is in 2 months, I've been paying 10% more for the last 8 months(extra £110 per month) but I was just wondering if any knew if I overpayed by 20% -50% what the term reduces by or the amount you save.

My mortgage company won't give me such knowledge (the gits)
I would have thought there should be a calculator function somewhere on the web for precisely that, showing you how much you can save. I would also have thought your current provider should not be entitled to withhold that information from you!

But yeah, to echo Zim, in general as much overpayment as you can afford is good.

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Re: Overpayments on a mortgage

Post by Backlash »

Ashers wrote:Backlash, who is your mortgage with?

I have worked in this industry for 14 years and have plenty of contacts that could help you.

Zimmerman is right though, it is normally a % of your balance in overpayments.
It's with Halifax atm but will look to get a better deal with them when it runs out.
Last edited by Backlash on 21 Jan 2015, 22:11, edited 1 time in total.

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Re: Overpayments on a mortgage

Post by Tricky Tree »

Overpaid for a good while myself, kept our payments the same as rates reduced and have saved a forth e, hoped to be mortgage free at 50, wil be mortgage free at 44 (this year) helped by redundancy pay off but think overpayment stated we knocked 3 years off or something

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Backlash
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Re: Overpayments on a mortgage

Post by Backlash »

Zimmerman wrote:Massive saving. Pay as much as you can as quickly as you can.

Is the limit 10% per month or per 12 month?
And it's usually 10% of balance rather than repayment amount (but I'm no expert).

ie if you could, pay £500 off or £1000 (or whatever you've got). Dont pay it monthly (finances permitting of course).

If your renewing, the option of one that doesn't have a limit on repayment is definitely preferable, but ultimately that's offset by rates and fees on offer.
They told me only over the phone I can only overpay 10% more than the the monthly payments i.e. I used to pay a shade over £1,000 pcm so now we pay around just over £1100.00 with the additional 10%
Maybe I should clarify the overpayments again with customer services as I can't really be bothered to change providers when the current mortgage expires.

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Re: Overpayments on a mortgage

Post by murf »

Change providers!

The key thing is the interest rate (and time you are fixed for).

Or get a flexible mortgage balanced against your bank account. Then anything you stick in your "savings" account acts as an over payment plus you have the benefit of being able to spend it if necessary.

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Re: Overpayments on a mortgage

Post by bluenosey »

Backlash wrote:
Zimmerman wrote:Massive saving. Pay as much as you can as quickly as you can.

Is the limit 10% per month or per 12 month?
And it's usually 10% of balance rather than repayment amount (but I'm no expert).

ie if you could, pay £500 off or £1000 (or whatever you've got). Dont pay it monthly (finances permitting of course).

If your renewing, the option of one that doesn't have a limit on repayment is definitely preferable, but ultimately that's offset by rates and fees on offer.
They told me only over the phone I can only overpay 10% more than the the monthly payments i.e. I used to pay a shade over £1,000 pcm so now we pay around just over £1100.00 with the additional 10%
Maybe I should clarify the overpayments again with customer services as I can't really be bothered to change providers when the current mortgage expires.
10% seems standard. Same with my mortgage until the term is up in March. Then, according to my mortgage, I can repay what I want. Just a pity I don't have the spare loot these days :!:

On another point, if banks are going to start offering decent 10 year mortgage deals, that doesn't say much for the economy of the UK, Europe, maybe the World in the forseeable future. It doesn't bode well as a whole.

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Re: Overpayments on a mortgage

Post by bluenosey »

murf wrote:Change providers!

The key thing is the interest rate (and time you are fixed for).

Or get a flexible mortgage balanced against your bank account. Then anything you stick in your "savings" account acts as an over payment plus you have the benefit of being able to spend it if necessary.
Just got to watch those pesky mortgage set up fees.

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Re: Overpayments on a mortgage

Post by Zimmerman »

bluenosey wrote:
Backlash wrote:
Zimmerman wrote:Massive saving. Pay as much as you can as quickly as you can.

Is the limit 10% per month or per 12 month?
And it's usually 10% of balance rather than repayment amount (but I'm no expert).

ie if you could, pay £500 off or £1000 (or whatever you've got). Dont pay it monthly (finances permitting of course).

If your renewing, the option of one that doesn't have a limit on repayment is definitely preferable, but ultimately that's offset by rates and fees on offer.
They told me only over the phone I can only overpay 10% more than the the monthly payments i.e. I used to pay a shade over £1,000 pcm so now we pay around just over £1100.00 with the additional 10%
Maybe I should clarify the overpayments again with customer services as I can't really be bothered to change providers when the current mortgage expires.
10% seems standard. Same with my mortgage until the term is up in March. Then, according to my mortgage, I can repay what I want. Just a pity I don't have the spare loot these days :!:

On another point, if banks are going to start offering decent 10 year mortgage deals, that doesn't say much for the economy of the UK, Europe, maybe the World in the forseeable future. It doesn't bode well as a whole.
Or maybe it's a way of tying in a large chunk of the market ready for when the market goes ballistic and everyone starts needing new, bigger mortgages?

So rather than having to compete in 1, 2 or 3 years time... They be already got them (with people porting their existing product)?

That and also maybe a way of hurting their smaller rivals who might still be struggling?

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Re: Overpayments on a mortgage

Post by dingram041 »

Last 3 months; getting there:

As of 16th February
£58030 - £550 = £57480
£4426 - £46 = £4380 = £61860

£4380 - £1000 = £3380 + £57480 = £60860

As of 17th March
£57070 + £3340 = £60410

As of 28th March
£57124 + £2845 = £59969

As of 17th April
£56670 + £2803 = £59473

As of 24th April (approx)
£56705 + £2307 = £59012

Backlash...I additionally borrowed £20k for 12.5 years roughly, paying £172 monthly, the interest being £50. Now I pay £35 monthly, interest roughly a tenner. That is the £2307 figure in last entry.

I am on a tracker with Woolwich via Barclays.

On the mortgage of £75k for 14 years originally, paying £550 monthly, the interest is £165 monthly, obviously not decreased as no overpayments to this YET :wink: .

I don't get hit with any overpayment charge for additional borrowing...but when I overpay the original amount of £75k early, it is a £275 early repayment charge only.

Zim, I like the flexibility of the amount going down then overpaying. If I wanted to overpay the additional amount I've saved per month through the monthly payment, I can. Paying off early is what I'm doing....9.5 years early....£172 a month better off thanks to this thread and saving roughly £5700 in interest just from the £20k additional borrowing, not including the £40 I save in interest from now and what I have been saving in interest prior :mrgreen:

i.e. 9.5 years early x £50 interest saved = £5700.

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Re: Overpayments on a mortgage

Post by Backlash »

bluenosey wrote:
Backlash wrote:
Zimmerman wrote:Massive saving. Pay as much as you can as quickly as you can.

Is the limit 10% per month or per 12 month?
And it's usually 10% of balance rather than repayment amount (but I'm no expert).

ie if you could, pay £500 off or £1000 (or whatever you've got). Dont pay it monthly (finances permitting of course).

If your renewing, the option of one that doesn't have a limit on repayment is definitely preferable, but ultimately that's offset by rates and fees on offer.
They told me only over the phone I can only overpay 10% more than the the monthly payments i.e. I used to pay a shade over £1,000 pcm so now we pay around just over £1100.00 with the additional 10%
Maybe I should clarify the overpayments again with customer services as I can't really be bothered to change providers when the current mortgage expires.
10% seems standard. Same with my mortgage until the term is up in March. Then, according to my mortgage, I can repay what I want. Just a pity I don't have the spare loot these days :!:

On another point, if banks are going to start offering decent 10 year mortgage deals, that doesn't say much for the economy of the UK, Europe, maybe the World in the forseeable future. It doesn't bode well as a whole.
After getting my annual statement this morning I contacted Halifax who still wouldn't allow me to increase overpayments beyond 10% of my monthly amount (only £100 overpayment), I then asked if I could pay 10% off of the whole amount spread over a year and they allowed that :?:.
With over £23,000 now being allowed in overpayments I'm hoping to cut down the years.

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Re: Overpayments on a mortgage

Post by bluenosey »

That should reduce your term nicely Backlash 8-) I would compare to one of the on-line calculators just to make sure the Halifax get their sums right.

I've just switched to the Coventry, 1.99% but their Standard Variable Rate. Comes with offset account, so just in the process of getting salary and all DDs switched over. The offset will kick in nicely overtime

I hear the Yorkshire have a fixed 2yr now for something like 1.09%, 65% LTV ? Shows that the rates are going nowhere in the near future and the economic outlook is still pretty gloomy.

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Re: Overpayments on a mortgage

Post by Backlash »

£23,000 allowed Bluenosey, but that won't happen :lol:


I've now started overpaying by £300 PCM but I guess I will need to substantially increase that if to knock any of my term off dramatically.

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