We are now making a substantial overpayment every four weeks, with the hope of finishing the mortgage in about two and a half years so I can start thinking about early retirement (yay!).
Our mortgage was originally with the C&G, now technically Lloyds though correspondence still arrives headed C&G. The T&C has been a moveable feast over the ten years or so it has been running.
At first we had a card which we used to make the overpayment and could specify whether we wanted term or payment reduction.
Then we went through a phase when C&G were charging a £10 up front fee for handling capital repayments, but still with the ability to choose how it was applied.
However since the Lloyds takeover we noticed the payment was always being reduced rather than the term. When I queried this, I was told the only way to get the term reduced was to re-negotiate the mortgage each time, involving an interview and fee! As we are on the residual C&G base rate + 2% which followed our initial fixed rate we would be mad to change that. So now, every time we get a letter the payment has dropped, which is not after every capital repayment, we just increase the extra by the same amount. I also queried as our mortgage is getting down to around the £30k mark and some months we are paying £500 extra, whether the 10% restriction applied and was told on our product it doesn't. So happy days all round really and it is nice to see the end of the mortgage (and my retirement!) getting closer by the month.
