Overpayments

10% annual overpayment allowance

Your client can save money by making overpayments of up to 10% a year.

And they can benefit even more as their overpayment allowance is based on the original loan amount and not the reducing balance.

NB: If your client overpays by more than 10% a year Early Repayment Charges will apply during the deal period.

Example for new purchase or remortgage

Product Reservation Date 29/05/2014
Loan Amount £100,000
Overpayment Allowance 10% of £100,000 = £10,000
Mortgage Completion Date 02/07/2014
Allowance of £10,000 reset at next anniversary date until the end of the benefit period 01/08/2015

In the example above, the original loan amount advanced on 2 July 2014 is £100,000, making the year one overpayment allowance £10,000.

Whatever the balance at the end of year one, the overpayment allowance for year two remains calculated as a percentage of the original balance (£100,000 x 10% = £10,000).

Important information

For products reserved on or after 29 May 2013:

  • If your client overpays by more than their overpayment allowance each year, an Early Repayment Charge will be payable on the amount paid in excess of the overpayment allowance
  • The annual overpayment allowance is only applicable whilst in the deal period of our fixed and tracker rate mortgages
  • Tracker rate mortgages reserved after 2 May 2014 have no ERCs so your clients can make unlimited overpayments without incurring a charge
  • The original loan amount advanced is that quoted in Section 6 of the KFI/Offer
  • Percentage allowance is a calculation of the original loan amount minus any administrative fees.

For products reserved on or before 28 May 2013:

  • These will remain on the £500 per month overpayment allowance
  • Any Early Repayment Charges incurred will apply to the entire overpayment amount

Our BMR/SMR, which is currently only available to existing customers reaching the end of their deal period, allows unlimited payments so your client can overpay by as much as they like, when they like.

Terms and conditions apply.