Overpaying mortgage with an inheritance between tie-in periods

[TittyNotSusan]

I have a fixed rate deal on my mortgage which expires in November. I recently had some money left to me, and have decided with savings rates being so rubbish that I will pay a lump sum off my mortgage.

I already overpay £50 a month anyway, so it would take me over the 10% I'm allowed to overpay each year.

Can I overpay as much as I want after my deal expires in November and then go onto another fixed / tracker tie in straight away afterwards? I can't understand the rules on my mortgage letter.

It's an RBS mortgage and I'd probably stay with them.

Yes, overpayments that take you above the 10% are repayment of capital and therefore attract any applicable early redemption penalties.

Check that your mortgage doesn't include an overhang that would continue to apply early redemption charges for a period beyond the fixed rate term (not that common but just check to be sure). You can then indeed pay off as much of the capital as you want to before switching to a new mortgage deal at a lower borrowed sum.

Thanks Sunseed.

That's great. I know I can't pay it before November, but I wasn't sure on the rules. I don't think there are any penalties after that.

We're switching from one fixed rate to another with Barclays shortly and our advisor there said that we can overpay as much as we like in the last month before our rate expires despite the normal 10% rule. Not sure if this only applies to Barclays/Woolich though, might with worth checking out with your lender :)

Phone your lender up and ask them what you can do. We thought we could only pay 10% off and it turned out we could pay the whole thing off without penalty!