Confused but happy - mortgage

DorsetDude

DorsetDude

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Keith
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Im on a life time tracker still a good few years to go. There have been two(i think) mortgage rate rises in the last few years, each time its happened I get a letter saying my payments will change, and heres the weird bit, they go down!
The latest one the monthly has gone down by £30. Im guessing it must be something to do with the fact that Im overpaying each month and maybe when the rate rises they do a recalculation of things and that causes my monthly to drop?

Any ideas?

Thanks
 
Could be.
I'd have a word with them and up my monthly payments if you can afford it. It pays it off faster which can't be a bad thing.

I'm mortgage free :)
Been there, done that!
 
pay as much as you can during the crazy low interest rates.
Myself and Mrs Bump quadrupled out mortgage payment when the interest rate crashed and just wiped it out.
 
I have also been overpaying my mortgage with Nationwide and on both recent occasions when the rate changed (went up) the payment went down. Reading about this I had opted not to have my payment recalculated every month when I made an overpayment which meant that the amount owing reduced by the value of the overpayment plus the difference between the interest due (calculated on the balance owing) and that paid. When the rate changed the monthly payment was recalculated based on the actual amount owed so the payment due went down It might be worth a bit of digging on your mortgage providfer's web site to see if they do a similar thing
 
Yeah, gotta be something to do with them NOT wanting you to pay off your mortgage quicker...:cautious:
Mebbe the change in interest rates is their opportunity to change your repayments.
 
i overpay every month on 2 mortgages with different rates on the one property. I make a set payment every month, if the rate changes I get a letter to confirm the minimum repayment amounts for each but the amount I pay doesnt change. I would speak to the bank but suspect that they have recalculated the value of the mortgage over the remaining term and applied the interest rate.
 
+1 on overpaying, we started overpaying about 13 years into the mortgage around 10 years ago when we started getting the letters saying the endownment wasn't going to make enough to pay the capital off, It was only about £50 a month but when I was made redundant 3 years ago it surprised me how much the original loan amount had dropped and we were able to pay it off with some of my redundancy payout.
 
I bought a flat in 2006 at 0.5% above the 5% base, the rate increased to 6% over the first year. When it started dropping I left the repayment at the 6.5% amount. In the 3.5 years the base rate was at 0.25% we overpaid enough to reduce the mortgage by 30%. We moved to a house in 2011 and the equity from the flat significantly reduced the the mortgage equity ratio giving us one of the lowest rates available.
 
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