I was in the fortunate position recently to be able to transfer money to pepper over our usual repayment amount. I sent through a few amounts over a number of months. I rang them last week to make sure all was in order. The transfer goes to a Pepper account and you put your mortgage account no on it as reference. I thought this would be straightforward. Anyway the lady on the phone said I needed to sign a form to indicate what I want done with money. She was also vague as to where the money is now and mentioned my "holding account". I have received the form and it states: Option 1 term reduction: I authorise Pepper Corporation to reduce the term of my mortgage account X with the lump sum payment of X to 154 months. I accept that the revised payments upon receipt of this signed acceptance will be in line with the applicable variable rate. I accept that all other terms and conditions remain as per the original Mortgage Agreement. It is the second last line I am worried about ...does this give them freedom to change my rate? . I'm on a favourable tracker and do not want to go onto a standard rate variable. I do wish to reduce the term and not the monthly repayment.