Mortgage overpayment query

hi. I overowid my mortgage for the first 2 years of drawdown - tracker now but was variable. My understanding is that overpayment either reduced the loan Amont or reduces the term of the mortgage.
I Didn't stipulate at the time whether to take off principal or shorten the term - it was a while ago.
I contacted the mortgage company a few times and they have finally just got back to me now, with a letterr Acknowledging that I overpaid the mortgage and stating that the overpayment 'was take off the interest'. No statemet or anything Included.
Does this sound correct? How could a monthly overpayment be used to pay interest on the lown at w future date. Many thanks in advance.

That makes no sense.

An overpayment will always reduce the capital balance outstanding (the balance interest is charged on).
The only choice is whether it reduces the term (keep monthly repayment amount the same), or reduce the monthly repayment amount (keep term the same).

That's what I thought Redonion - how can an overpayment be used to pay future interest? They have kept the term the same and the repayments as far as I can tell.

The payments returned to normal repayment after the 2 years (kids arrived). I have requested the information several times from the bank and I finally received this one pager yesterday giving me this explanation.

Which bank? Was it EBS by any chance?

No - ICS (bank of Ireland) I presume they would have actual statements from the time they could cross check with?

Yes they would. Is it still with BoI, or move to Dilosk?
Some of the building societies had an unusual treatment where an overpayment sat unallocated until someone did something with it. I'm not familiar with ICS.
Have you validated your current repayment amount as being correct, or will it repay the balance before the stated term?

Still with BoI. Repayment looks correct and maturity date has not changed. I'll get back in touch with them and ask for statements. Only have a few years left so would be great if the overpayment had been unallocated But I'm sure they would have started this in their letter. I can live in hope! Thanks again.

xoxoxo said:

ask for statements.

Click to expand...

Hi xo

That is all that matters. Request a copy of your statement. It's fairly easy to understand. If you see the full payment being credited to your account, you will see that the balance you owe has been reduced by that amount.

That is what is important.

It's possible, but unlikely, that they have allocated it to an account elsewhere, waiting for you to tell them where to put it.

Brendan

many thanks Brendan. I'll request a full statement from them.