Depending on your mortgage product, there may be restrictions on the maximum amount you can overpay, either by regular overpayments or as a lump sum, in one year without incurring an Early Repayment Charge (ERC). You can usually repay a fixed percentage of your original mortgage balance per year without charge. For more details, see your mortgage offer or call us on 0345 850 1711.
Lump Sum overpayments
These are payments made in one transaction. They’re not included in your contracted monthly payment.
You should know that your contractual monthly payment could be recalculated if you make an overpayment.
The level at which we automatically recalculate payments may change.
If you make a payment that is 6 times higher than your monthly payment amount, or £2,000 and above (whichever is lower):
We’ll recalculate your contractual monthly payment to reflect the lower balance and remaining term. If you’d like to keep your mortgage payment the same, this will affect your overpayment allowance, so please get in touch to discuss your options.
If you make a payment that is less than 6 times your monthly payment, or less than £2,000:
We won’t recalculate your monthly payment unless you ask us to, but your mortgage balance will still reduce and the interest we charge you will reflect this. Please note, any overpayments you make will build as a credit to your mortgage account, but would not cause an immediate recalculation. That is unless an individual payment was greater than £2,000 or six monthly mortgage payments, as outlined above.
Regular overpayments
You can request for your monthly payment to be increased to include an overpayment alongside your minimum monthly payment. All money collected in excess of your monthly payment will count as an overpayment towards your mortgage.
Any change to your Direct Debit amount will continue each month. If you want to go back to paying the regular amount, just let us know. It will take at least four working days for the change in payment amount to go through.
| Mortgage amount | £100,000 |
|---|---|
| Remaining term | 15 Years |
| Interest rate | 5% |
| Minimum monthly payment (capital & interest) | £789 |
| Monthly overpayment | £100 |
| Interest saved | £7,231 |
Balance repaid 2 years and 4 months before the mortgage term ends
With both overpayment types listed above, there are some situations that may prompt an automatic recalculation – such as an interest rate change.
If this happens, we’ll include any overpayments you have made in the recalculation. This will ensure your new contractual monthly payment reflects your remaining balance and term. We’ll get in touch if this happens.
Mortgage overpayments calculator
Use our mortgage overpayments calculator to see the difference making regular overpayments could have on your mortgage.
