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If you paid off some of your mortgage in one go i.e. 10 grand ..

(12 Posts)
fivecandles Thu 25-Jun-09 21:27:46

Would your repayments go down or would you reduce the amount of years you pay back? Can you ask to pay back mortgage in say 8 years instead of 15? Thanks in advance.

IotasCat Thu 25-Jun-09 21:29:46

You would need to speak to your mortgage provider and see how flexible the terms are.

katz Thu 25-Jun-09 21:29:54

we went for the reduce the term option but we were also remortaging at the time. Worth chatting to you bank as not all allow over payments of more than X amount.

wonderingwondering Thu 25-Jun-09 21:29:55

No, your term would stay the same unless you changed it, I think. You can shorten the term separately if you like. You can often only make an overpayment of a certain percentage of the debt in each year, too.

ChippyMinton Thu 25-Jun-09 21:30:32

Depends on the terms & conditions of your mortgage. Our lender reduces the payments unless you specifically request that the term is reduced.

fruitstick Thu 25-Jun-09 21:30:55

I think it depends what kind of mortgage you have. Our last mortgage was flexible so if you did pay extra off, you could either reduce your payments or pay it off quicker. You could also set your own monthly payment amount (within reason obviously)

Check your terms. If it's not flexible you may find your monthly repayments going down, in which case you could bank the difference and make another lump sum payment every few months or so.

ChippyMinton Thu 25-Jun-09 21:31:40

Good point re level of payment. You may overpaybut be charged a % penalty.

fivecandles Thu 25-Jun-09 21:33:12

Thanks all. Will have to go in and speak.

ChasingSquirrels Thu 25-Jun-09 21:34:42

agree with the others, the 1st time we paid a lump sum off we kept the payments the same as we had just come out of a fixed deal, then negotiated another deal with a reduced term to keep the payments at that level.
2nd time we were still in the fixed deal but could overpay a % each year, so paid a lump sum off but kept the payments the same as the total overpayment generated by this was less than the total allowed for the next year.

You need to check yout t&c's.

trixymalixy Thu 25-Jun-09 21:47:00

I am about to pay off a chunk of my mortgage when it reaches the end of the fixed rate at the end of June. I phoned today to enquire about it and they offered me the option of reducing my monthly payments or keeping the payments the same and reducing the term.

If I'd paid a chunk off before the end of the month i'd have to pay a penalty so definitely check that.

MaybeAfterBreakfast Fri 26-Jun-09 15:43:38

Same as ChippyMinton for us. We went for reducing the term.

mumoverseas Sat 27-Jun-09 10:52:24

payment would go down but term would stay the same unless you contact them and request to change the term of the mortgage.

We made a large overpayment about 4 hours ago and the payment went down and then we arranged to pay it off earlier so it is due to finish in 2 years instead of about 10. What we didn't realise was that the 75k overpayment was held on a 'reserve' so was available to use without applying for a new mortgage. This was really handy as we 'borrowed' some back last summer to pay for a loft conversion without having to worry about lots of paperwork.
we are now overpaying as and when we can (some banks/building societies have minimum payments such as £500) but it is great if you can afford to do it as you really notice the difference with the outstanding amount noticibly going down every month

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