You may feel you can afford to start paying extra off your mortgage. The advantage is that the sooner you do, the less interest you’ll pay overall. You could:
Specify an extra amount you want to pay regularly each month
Make a one-off, lump sum payment
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Where interest is calculated on a daily basis, your balance is reduced following every payment so the interest you're charged will go down. However we won't recalculate the monthly payment each time, we'll wait until the next time there's some other reason for recalculating your monthly payment, such as a rate change. If you're not sure whether your mortgage is on daily interest, please contact us.
Set up, amend or cancel a regular overpayment
Complete the form below to set up, amend or cancel a regular mortgage overpayment. You’ll need your mortgage account number, which can be found on your mortgage statement or other mortgage related letters.
You can pay part of your mortgage whenever you want. They are known as lump-sum overpayments. When you make a payment, your mortgage balance will be reduced on the day we receive the money, and you'll start to be charged less interest. Then, because your balance is lower, you can either:
Keep paying your current monthly payment so that you repay your mortgage sooner. However, when we next re-calculate your monthly payment, for example at an interest rate change, we will set the new monthly payment to a level that will repay your mortgage over the current mortgage term. Or
Ask us to re-calculate your monthly payment immediately, so that you get to reduce your monthly payments but still repay your loan by the end of the current mortgage term. Or
If your mortgage is set up on a repayment basis, you can apply to change the remaining term. If you do this, you will need to speak to one of our Mortgage Advisors who will check that you can afford the monthly payments over the new term and advise you if this is right for you.
If you make a lump-sum overpayment, it can't normally be refunded at a later date.
An early repayment charges applies on some mortgages. You may have to pay an early repayment charge if, during your early repayment charge period, you repay more than a certain amount of your mortgage or switch to a new mortgage deal. As a current concession you can make, each year, extra payments of up to 10% of the mortgage balance (as at 1st January) before a charge applies. We may reduce or withdraw this concession but will give you three months notice before we do.
The limit on any extra payments you can make each year before the charge applies is 10% of the mortgage balance outstanding on 1st January each year. This means you can pay up to 10% of your mortgage balance before incurring the charge, unless you go on to repay or change the rest of the loan within the next six months. The charge varies, depending on how long you have left on your mortgage deal.
As you can see, there can be different results if you make a lump-sum overpayment - so it's always best to contact us to let us know what you want to happen.