Mortgage lenders which specifically allow monthly underpayments if overpayments have been made?

[ComtesseDeSpair]

As the title. Need to remortgage in the next couple of months and have been looking around. I’m currently with Halifax, who specifically allow me to underpay the mortgage to the value of any overpayments made in the preceding 12 months. I make a £2000 overpayment every month. I’m not expecting to have to utilise the facility, but as sole earner right now it’s great peace of mind to know that if I did lose my job, I could stop paying for several months based on my overpayments.

Halifax don’t have the best rates; but other lenders only seem to allow an official six month mortgage holiday or interest-only period rather than being able to fully utilise overpayments. Are there other lenders which anyone is with who do offer this? Thanks so much.

Surely an offset mortgage is what you’re looking for?

Would it not make more sense to pay the money in a high interest account savings or an ISA if you aren’t already at the limit and pay a lump sum at the end of the term or each year? Then you could lock into the most favourable interest rate for your mortgage, gain interest probably in excess of your mortgage interest rate on the overpayments, but they’re accessible for you if you need them before you make your lump
sum.

Yes you'd be best just saving the money separately as you should be able to match or even beat the mortgage rate and it gives you complete flexibility.

Offset mortgages don't have great rates so likely better to make your own arrangements.

I overpaid with Yorkshire Building Society and phoned to ask.if I could have a payment break for 3 months. They said I could have 3 years.

Thanks all. Will run a few more calculations and work out the optimal plan. There are few offset mortgages around and they’re also not at good rates; I’m already at the ISA limit and pay higher rate tax for interest on savings anywhere else, so outside of very long notice savings accounts (not ideal as my concern is around liquidity in the event of job loss) saving currently works out less efficient than staying with Halifax and overpaying. Will also try to speak with a mortgage broker.

Pretty sure you can do that with TSB. I’ve had two 10 year fixes with them but on a fix and flex way so I could change deal after 5 years. I overpay but checked to make sure I could have a payment holiday to the value of my overpayments. Especially useful since benefits aren’t much help when it comes to mortgages!

Our nationwide mortgage allows for exactly that, you can always see how much you've overpaid and ask to stop payments which then come from that overpayment pot.

I was going to say Nationwide too.