There may be times when you want to pay more or less than your monthly payments.
You can use our mortgage overpayment calculator to understand how much you could potentially overpay on your mortgage.
What are regular overpayments?
Regular overpayments are amounts you pay that are extra to your monthly mortgage payments. They reduce the amount you owe on your mortgage. If interest on your mortgage is charged using our Daily Interest method they also reduce the amount of interest we charge because we calculate interest on the reduced balance from the day we receive the overpayment.
How do I make regular overpayments?
- You can make regular overpayments by increasing the amount you pay each month.
- You can do this by asking us to collect an extra amount each month along with your monthly payment.
- We will share any extra amount received across all parts of your mortgage
Will there be a charge for making a regular overpayment?
You may have to pay an early repayment charge if you are making an overpayment during an early repayment charge period. Your Illustration and offer letter will tell you if early repayment charges apply and how long for.
After the first year of your mortgage your annual statement will tell you this.
If we have an early repayment charge concession when you make your overpayment, you will pay an early repayment charge on only the part of the overpayment that exceeds our concessionary limit.
Bear in mind that if you make any lump-sum overpayments during the year, these will count towards your 10% early repayment charge concession.
Lump-sum overpayments
What are they and how do I make them?
- You can make a one-off lump-sum overpayment by making a separate payment.
- You can do this by calling into your local branch or by phone; where we’ll ask if you want us to work out a new monthly payment on your reduced balance.
- You can also make a one-off payment online, but we will not automatically recalculate your monthly payment. If you would like us to work out a new monthly payment please contact us.
- Even if we don’t work out a new monthly payment for you, we will reduce the interest we charge by calculating it on the reduced balance.
- We will share any lump-sum overpayments received across all parts of your mortgage, unless you ask us to apply the payment to a specific part of your mortgage.
Making a lump-sum overpayment will reduce the amount of interest you will pay us over the life of the mortgage because you are reducing the amount you owe.
If interest on your mortgage is charged using our Daily Interest method, we will stop charging you interest on the amount of the lump-sum overpayment on the day we receive the money. If interest on your mortgage is charged using the Annual Interest method, we will stop charging interest on the amount of the overpayment at the beginning of the year following the payment being made. If you don’t know which method is applied to your mortgage, or if you would like to change to the Daily Interest method, please call us on 0345 603 1637.
You need to tell us if you want us to use the money to reduce the monthly payments by keeping the mortgage term the same.
If you would like to reduce the remaining mortgage term you will need to speak one of our qualified mortgage advisers, who will discuss your needs and circumstances and recommend the most suitable mortgage, and term for you.
If you have an interest-only mortgage, you can ask us to reduce the mortgage term but only if you can show us that your repayment plan(s) to repay the loan at the end of the term will provide enough money to do so sooner.
Will there be a charge for making a lump-sum overpayment?
You may have to pay an early repayment charge if you are making a lump-sum overpayment during an early repayment charge period. Your Illustration and offer letter will tell you if early repayment charges apply and how long for. After the first year of your mortgage your annual statement will tell you this.
If we have an early repayment charge concession when you make your lump-sum overpayment, you will pay an early repayment charge on only the part of the lump sum that exceeds our concessionary limit.
Remember: if you make regular overpayments during the year, these will count towards any early repayment charge concession.
Can I choose which part of my loan I repay?
Yes. If you make a separate lump-sum overpayment, you can choose which part of your loan you want the payment applied to, but only if you are up to date with your monthly payments on each part of your loan.
- You may want us to reduce the part we charge at the highest interest rate, or
- You may want to reduce the part that does not have an early repayment charge on it.
If you don’t tell us which part of your loan you want to repay, we’ll share it across all parts of your loan in the same way we share your total monthly payments.
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