Paying off a chunk of mortgage

[Thingsthatgo]

We have been given £100k which we would like to put into our mortgage of £215,000. We hope to pay the rest off within 5 to 10 years. Our current 5 year deal finishes in December.
Our broker has said that, if we want to pay in a large amount we should wait until our deal is up and go onto the SVR for one month to pay it, then begin the new deal.
I understand that we don’t want to pay any charges for overpayment, but I had assumed we could put the £100k in as part of taking out the new deal, pretty much simultaneously.
We can obviously overpay a bit each year, but I’d rather get this bit paid off, and have the option to over pay as well.
Does anyone have any experience of this?

I’d have thought the same as you. Surely your deal ends and then you ask to borrow £100K less than you would have done otherwise as part of any new deal?

The day you switch there is a window you can pay in more. We always did this.

Yep, I would have paid max I could now (stay under annual overpayment amount) then the rest as soon as current fix finishes & check out best deal around for new fix.

maybe that's what he meant?

Thanks - he definitely says that we will need to go onto the SVR for one month. I was surprised, but he is a very experienced broker so I assumed he knew what he was talking about. I’ll check with the bank that we have our mortgage with.

We were allowed to make unlimited extra payments in the last month. Definitely check as it doesn’t sound right.

Speak to your bank this doesn’t sound right at all

i had a big overpayment balance (in relation to my mortgage) but it was shown in a separate holding mortgage account. When going through the switch the bank transferred it back to me then I authorised a payment back to them to reduce the mortgage renewal, without impacting my overpayment limit and getting a much reduced LTV

don’t listen to your broker

Usually you can a percentage down each year without penalty, about 10%. I would give your mortgage company a call.

Just to add my remortgage overpayment amount was 40% of mortgage total and no issues. And it let me keep my 10% the following year

Agree… This doesn’t sound right

but very honestly if you haven’t already maxed out your 2025 allowance I’d put 40k into a S&S ISA (£20k each) and overpay by £60k.

reason: you just don’t know what life will throw at you and you can still pay it off at the 5 or 10 year mark and It’s likely to outperform the mortgage in terms interest.

I would call the bank directly and check but if I remember rightly from working in a branch, the new product just rolls over and there’s no overlap where you can pay the chunk off without incurring charges. Plus (again if I remember rightly) they need the overpayment to physically come off the balance to be able to offer a new product once your LTV has adjusted. It did seem daft to me but when I spoke to mortgage advisors in branch I’m sure this is what they’ve said.

Check with the bank, brokers have been wrong with me before and I went directly to the lender to check their policies myself. Broker’s are only good for shopping around. Your broker might be right that that’s all he can offer you with the deals he has access to, but the lender might be different. I’d start over paying now, as interest accrues daily. So you’ll save that interest.

They explained something like this to me too when I considered going into SVR to see if rates fell after a month. SVR is extortionate so the extra cost felled any possible advantage.

We are doing just this - taking out a new mortgage with different provider for a lower amount and we will pay part of the outstanding balance from our account and the rest from the previous mortgage provider if that makes sense. New mortgage will start one day after the old one finishes to avoid overpayment charges.

We paid off a chunk when we switched last time. No need to go onto SVR to do this. As others said it doesn’t seem right to me

We paid off a chunk when we switched last time. No need to go onto SVR to do this. As others said it doesn’t seem right to me

I found that the on line chat with the mortgage division was really helpful. We could over pay monthly to the tune of 3x the monthly amount and once a year pay off 10% of the remaining amount within incurring any charges. More than that and yes we would have had to have waited until we came to a remortgage point to be able to pay off more without a charge. But the charge maybe less than the extra interest you're paying on owing the larger amount - again with our bank we could ask for a redemption statement at any point without commitment to see the fees we would pay.

But there are a lot of people, myself included, where this clearly isn’t the case and you can do this as part of the switch

We let ours roll into the SVR for 2 days, we cleared the mortgage we had for our extension , paid £14k off our main mortgage too

I did this in January, I was put on SVR for three days whilst the overpayment went through.

This happened me in February. My mortgage just rolled over too with no opportunity to put down a lump sum. Worse, I had arranged the new mortgage a few months in advance to lock in a good rate and while waiting for the new mortgage to start I could continue making my monthly overpayment but not any new lump sums. I’m sure however, I could have rung up and sorted it, but my lump sums would have been 1k rather than 100k so I never bothered. I would check directly with the bank. For info, mine was Santander.

Oh this is interesting. My broker said SVT for a month, which seems expensive - but a few days would be fine. I will ask, thank you 😊