I want to make additional payments or overpayments
We want to help you manage your mortgage more effectively. If you have a mortgage which allows you to make additional payments or overpayments, you are able to make extra payments on top of your standard monthly payment either by making regular overpayments or by making lump sum payments. This means you could:
- Pay off your mortgage earlier
- Reduce the amount of interest payable - the interest chargeable on the outstanding mortgage balance is calculated every day rather than every week, month or year
Firstly, you need to check what type of mortgage you hold:
- If you have a fixed or discounted rate mortgage, you'll have an annual overpayment allowance (AOA) to enable you to make additional payments during the fixed or discounted rate period without incurring an early repayment charge. The allowance is equivalent to 10% of the outstanding balance of your mortgage calculated on each anniversary of the start of your fixed or discount rate period
- As long as you do not exceed your annual overpayment allowance during a year when the Early Repayment Charge applies, you can make as many overpayments as you like within that year either by increasing your monthly mortgage payments or making lump sum payments
- If you exceed your annual overpayment allowance, the ERC will be charged on the amount you have repaid over the allowance
- HSBC Tracker/ HSBC Variable/HSBC Home Buyers' Variable rates have no limits or charges for making additional payments.
How to make overpayments and additional payments
- Log on to Online Banking to view details of your annual overpayment allowance and transfer a lump sum to your mortgage account or contact one of our dedicated Mortgage Specialists on 0800 169 6333. If you do not hold a HSBC current or savings account, please contact your own bank to transfer a lump sum to your mortgage
- If you'd like to make regular overpayments by increasing the Direct Debit for your monthly mortgage payment, or if you'd rather reduce your monthly mortgage payment instead, you can send us a secure e-message through Online Banking or call one of our dedicated Mortgage Specialists on 0800 169 6333.
Payment and overpayments FAQs
What is the standard monthly mortgage payment and how is it calculated?
If you currently pay interest only, your standard monthly payment will be the amount you need to pay each month to cover the interest that has accrued on the capital balance of your loan. It is based on how much interest will be paid over the term divided by the number of monthly payments.
If you currently pay both capital and interest (known as capital repayment), your standard monthly payment is the amount you need to pay each month to cover both the interest that has accrued on the capital balance of your loan and part of the capital. It is calculated so as to ensure that, if you make all of the required payments in full and on time, your loan will be repaid by the end of the term as shown on your Offer Document.
Can I overpay if my mortgage has Early Repayment Charges?
Yes you can subject to limitations. Please visit Online Banking for details of your Annual Overpayment Allowance (AOA). As long as you don't go over your AOA for the year, you won't incur an Early Repayment Charge.
You can overpay by making regular over payments or irregular lump sum payments and these will count towards their AOA. Once you exceed your AOA for the year, any additional overpayments within this period will incur an Early Repayment Charge.
Can I make overpayments and reduce the term of my mortgage?
Please contact us to discuss a reduction of your mortgage term and increasing your standard monthly mortgage payments. This is for your protection as it enables us to assess and confirm whether you can afford to pay a higher amount for the remainder of the shorter mortgage term. Please call us on 0800 169 6333, lines open Monday to Friday 8am-9pm, Saturday 8am - 8pm, Sunday 9am - 6pm.
How often should I review my additional payment arrangement on my mortgage?
For fixed and discount rates, we recommend you review your additional payment arrangements at least once a year.
Your annual overpayment allowance is calculated once a year on the anniversary of the start of your fixed or discount rate period. This calculation is based on the remaining capital balance of your mortgage account on this day, and if this amount is not exceeded there will be no additional charges, such as early repayment charges.
You can use all or part of your allowance at any time during the 12 month period, either by making regular monthly overpayments, one off lump sum payments, or a combination of these.
For tracker and variable rates, while there are no restrictions to the amount you can overpay each year we would always recommend reviewing your additional payments regularly throughout the life of your mortgage to ensure you are on track to repay your lending by the end of the term agreed.
You can send any review queries by secure e-message system from Online Banking or by calling 03457 662255, lines open Monday to Friday 8am - 6pm, Saturday 8am - 5.30pm.
I make regular overpayments through Direct Debit payment. Do I need to change anything following a change in the Bank of England base rate?
Fixed rates: there will be no change to your payments following a Bank of England base rate change.
Tracker rates: there will be an impact to your payments following a Bank of England base rate change. This will take effect within 1 day of this change. We'll notify you in writing the impact of this change on your mortgage. You'll also be able to find a copy of this letter in 'My docs' on Internet Banking.
Additional payments: If your additional payment is a set amount on top of your standard monthly payment, the total amount you pay will change in direct relation to the base rate change, e.g. if the Bank of England base rate increases, your monthly payment will also increase.
If you have set your additional payment to be a 'total amount' that includes your standard monthly payment e.g. £750 per month, of which £455 is your standard payment and £295 is your additional payment, we will not change your total payment until your standard monthly payment exceeds the total amount set.
If you're unsure how your additional payment is set up you can call mortgage servicing on 03457 662255, lines open Monday - Friday 8am - 6pm and Saturday 8am - 5.30pm. Alternatively you can send us a secure e-message via Online Banking.
Why is my final payment date showing as the date on the mortgage Offer Document when I've been overpaying?
The date your mortgage will end is confirmed in your most recent mortgage correspondence or mortgage Offer Document you have received.
Any additional payments made could result in you repaying your mortgage before this date. However any changes to your rate, payment amount or payment date will result in your standard monthly payment being recalculated against the term set out in your offer document. Additional payments will unofficially change the date your mortgage will end.
For interest-only mortgages your monthly payment will be the amount required to cover the interest that has accrued for the past month on the capital balance of your mortgage. This amount will remain constant until there is a change to your loan, for example, change in rate, or payment date.
If you have any further questions, please call us on 03457 662255. Opening hours: Monday - Friday 8am - 6pm and Saturday 8am - 5.30pm.
My final mortgage payment has been made but the direct debit has picked up a subsequent payment in error. When will I get a refund?
Any overpayment will be refunded to the originating account and this should be within 7 working days.