Repayment Mortgage - pay in money

I'll bet that's a misunderstanding. Normally they change the interest rate within a month of when BoE base rates change. What they change each January will be the monthly amount they will expect you to pay each month for the next year.

It sounds as though your BS operates annual rests. That means if you pay them the 9k now, it won't actually come off your effective balance until the end of January. It might be an idea, therefore, to stuff the dosh into a savings account for 6 weeks, and then pay it in, so at least it will have earned some interest in the mean time. But the difference is only, what, some 30 or 40 quid, so probably not worh the hassle.

It would be as well to establish: (1) that they do in fact allow you to make penalty free lump sum repayments, and (2) whether such repayments come off the balance straight away.

If yes to (2) then there's no need to bother with keeping the money in savings until January. Pay it off as soon as possible.

In message , S K writes

If its £9K in notes, rather than in a bank account, be ready to answer serious questions regarding the origin of the money.

I think the limit for the Money Laundering stuff is higher than £9K, but I would still expect the grilling.

Thread copied below for information

I agree with Ronalds advice below. Important to make sure that the mortgage provider allows capital repayment without penalty. Even more so if you are subject to a redemption tie in period after enjoying discount or fixed rate terms.

Consider repaying more expensive debt like credit cards or store cards first?

Cheers Ian.

I'll bet that's a misunderstanding. Normally they change the interest rate within a month of when BoE base rates change. What they change each January will be the monthly amount they will expect you to pay each month for the next year.

It sounds as though your BS operates annual rests. That means if you pay them the 9k now, it won't actually come off your effective balance until the end of January. It might be an idea, therefore, to stuff the dosh into a savings account for 6 weeks, and then pay it in, so at least it will have earned some interest in the mean time. But the difference is only, what, some 30 or 40 quid, so probably not worh the hassle.

It would be as well to establish: (1) that they do in fact allow you to make penalty free lump sum repayments, and (2) whether such repayments come off the balance straight away.

If yes to (2) then there's no need to bother with keeping the money in savings until January. Pay it off as soon as possible.

On my experience (with a bank rather than a building society), 'special arrangements' would be a rather grandiose way of putting it, but they did appreciate a quick phone call first before I actually turned up with the money

Martin

No problem with that; the money is legit. Honestly earned and tax paid on it.

I just to make inroads into the mortgage instead of wasting the money on gadgets.

You might consider using a portion (3-500 pounds of it) to pay costs to switch over to a smaller fixed rate (hopefully lower than current mortgage) with the same or some other BS, so as well as paying off a lump, you have lower interest charges for a few years, unless you'll be likely to repeat the same on a regular basis, in which case there may be some penalties (however, I've found that even a 2% penalty on the amount can be worth paying, if you'll overall pay less interest, as the total payable over a long repayment term will be multiples of the amount borrowed, and I will happily pay off my mortgage faster).

I don't know whether they still do it, but the Halifax for one used to have the option available that the actual monthly payment was only changed once per year, in January, when the effects of any interest rate changes in the previous year were taken into account. The interest rate changes were applied to the account as they arose.