Do your homework before you overpay!



One of the best ways to supercharge your mortgage payments is by making overpayments.


Generally lenders will allow you to make over payments of up to 10% without you facing any penalties but you need to be carefull that you do not stray into penalty territory by overpaying too much. No point in paying money into your mortgage if you are going to be penalised for doing so.


You would have thought that every lender would be the same as far as how they calculate the 10% but they are not! It certainly pays to do your homework before making the lump sum or setting up that standing order. Some lenders will say that the 10% is calculated on "your original mortgage balance per mortgage anniversary year" without incurring an early repayment charge. So if you borrowed £170,000, the most you would be able to overpay each year would be £17,000. Others say that you can overpay by up to 10% of "the previous year-end balance of your mortgage each year", so the amount you can overpay goes down each year because the amount you owe also goes down each year. One lender even allows you to make overpayments of 20% of your standard monthly repayment rather than linking overpayments to the outstanding loan amount.


So it's worth checking with your lender and make sure thagt you do it before you apply!

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. BRICKS AND MORTAR MORTGAGES LIMITED IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.