If you’d like to make extra payment(s) on your mortgage please contact us first on 0800 121 6263 to discuss your options.
If you pay extra towards your mortgage, the amount you pay will determine whether it’s treated as a capital repayment or an overpayment.
Overpayment or capital repayment?
If the equivalent of three times your contractual monthly payment is £1,000 or more then:
- Any extra payment of at least three times your monthly payment will be treated as a capital repayment.
- Any extra payment less than three times your monthly payment will be treated as an overpayment.
If the equivalent of three times your contractual monthly payment is less than £1,000 then
- Any extra payment of £1,000 or more will be treated as a capital repayment.
- Any extra payment less than £1,000 will be treated as an overpayment.
Please note, if you have an interest‐only flexible drawdown mortgage, any additional payment(s) over £500 will automatically be treated as a capital repayment.
Daily or annual interest?
If your mortgage is on our daily interest scheme we will credit your overpayment to your mortgage account immediately, which means you will be charged less interest overall. However, we will not treat this as a capital repayment unless you specifically ask us to and the terms and conditions of your mortgage allow it. This means that your payments will not automatically be recalculated.
If your mortgage is on our annual or half‐yearly interest scheme, your mortgage balance will be reduced immediately when we receive your overpayment. We will not automatically recalculate the interest charged until the following 1 January, or for half‐yearly interest scheme accounts either 1 January or 1 July, whichever applies to you.
Other information about overpayments
If your mortgage is split into 'sub‐accounts' and you do not tell us which sub‐account(s) you would like us to apply your overpayment to, we will credit the payment between sub‐accounts, subject to any regulatory requirements.
If you would like more information about how we have processed your payment please call us.
Please remember that additional payments are subject to your existing mortgage terms and conditions which may include early repayment charges.
If your mortgage account is in arrears, additional payments may be processed differently.
Have an interest‐only mortgage?
Your capital repayment will reduce the balance of your mortgage. This in turn will reduce the interest we charge and therefore your contractual monthly payments will go down from the following month onwards.
Have a repayment mortgage?
Your capital repayment will reduce the balance of your mortgage and this in turn will reduce the interest we charge. You can then choose to either reduce your contractual mortgage payments from the following month onwards, or reduce the term of your mortgage, which means you will pay off your mortgage in a shorter period of time. If you would like further information, please contact us and our advisors will be happy to help you.
Letting us know how you would like us to treat your repayment
You must let us know how you would like us to treat your repayment. If you don't provide us with specific instructions we will use your last instruction, if less than 12 months old. If you haven't given us an instruction in the last 12 months, we will treat your extra payment as an overpayment regardless of the value (read more about 'How overpayments work').
You must let us know which sub‐account you would like us to apply your capital repayment to. Your mortgage account is likely to be split into sub‐accounts if you have taken out a further advance or your mortgage consists of both interest‐only and repayment ‐ please refer to your annual mortgage statement for details of this.
It is important that you let us know which of your mortgage sub‐account(s) you want to credit the capital repayment to. If you do not give us specific instructions we will treat your extra payment as an overpayment regardless of the value. We will credit the payment between sub‐accounts as we reasonably consider appropriate, subject to any regulatory requirements. If you would like more information about how we have processed your payment, please ask us.