An overpayment is any additional payments you make over your contractual monthly mortgage payment. These overpayments can either be a one off lump sum or a regular overpayment made throughout the year.
Whilst you’re in your fixed deal period, you can repay part of your capital balance each month (from the date your product started) without incurring any Early Repayment Charges.
Overpaying on your mortgage means you can save money on the total amount of interest you pay and potentially clear your mortgage balance quicker.
Paying early repayment charges
When you first took out your mortgage with us, you may have taken advantage of a lower interest rate for a set period, such as a fixed or discount tracker rate. If within this period you decide to change your product, we would incur administration costs. We'll make it clear when you select the product whether there is an early repayment charge. This is part of our policy to be honest and clear in our dealings with you.
Before making an overpayment
You may be charged an early repayment charge (ERC) if you pay over your overpayment allowance. Find out what your overpayment allowance is using the table below or refer to your original mortgage offer.
|Product Type||Overpayment Allowance|
|UCB fixed rate mortgage products||Typically 10%, but refer to your mortgage offer|
|UCB Managed Rate or Variable Rate mortgages||Unlimited|
There may be some instances where you may not have the overpayment feature on your mortgage - check your original mortgage offer to confirm.
When you make an overpayment, it goes into an overpayment reserve and it’s used to reduce the interest you pay on your mortgage balance. Some of our mortgage products allow you to overpay and borrow back these funds later on.
Check your mortgage offer to see whether you have this product feature, and if you do, you can overpay knowing you can access these funds back if you need to.
How will overpayments affect my mortgage?
We calculate the interest on your mortgage daily so all overpayments will reduce the interest you pay the following day.
- For overpayments of less than £500 per month:
We’ll reduce your minimum monthly payment at the next natural recalculation point, i.e. an interest rate change or annual recalculation.
- For single overpayments of £500 or more per month:
We'll automatically reduce your minimum monthly payments the following month unless you tell us otherwise.
How my payments will change once my allowance has been paid
For interest only mortgages, you can calculate what your payments will be by using the following formula:
Reduced balance x interest rate / 12 = new monthly payment
For repayment mortgages, the monthly payment will be dependent on the term, balance and interest rate of the mortgage account.
If you’re considering making an overpayment, you can contact us for an estimate of how the overpayment will affect your monthly payments.
Please note you may be asked for details of the source of funds for any overpayment (including partial redemption) and you may also be asked to evidence this.
How to make overpayments
We can only accept payments from bank accounts that match the name(s) on the mortgage. Any third-party payments received will be returned.
Change or cancel the regular overpayments made by direct debit?
Please call us on 0800 464 3014 or notify us in writing of any changes you'd like to make.
We’ll need to receive notification from you at least ten days before your next payment due date.