Overpaying a fixed rate mortgage

blendedblue

Registered User
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6
I have heard it is possible to do the following (but I want to check if there are any catches or potential pitfalls, i.e. is it a too good to be true scenario):

On a fixed rate mortgage I have heard that it is possible to overpay thus reducing the interest as the capital is being reduced further by the overpayment. However unlike overpaying a variable or a tracker, the money can be redeemed by simply contacting the bank and withdrawing the overpayment.

So this allows you to fix your interest rate but yet to lodge extra money to the mortgage account thus allowing overpayments to reduce the monthly interest calculated. But even better you can then withdraw all your overpayments. In essence it is just like an offset mortgage that used your current account to reduce your mortgage for interest calculation purposes (First Active offered such a mortgage)

I heard that while it is not advertised what I described is possible to do with EBS. What I am wondering is, is it really that easy and are there any potential problems doing this?

Thanks,

BB
 
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