Yes, you can make as many overpayments as you would like in any given month without any early repayment fees or charges.
In fact, unlike a mortgage, there is no such thing as an overpayment with our Home Provision Scheme. This is because there is no obligation on you to buy out our share over any set period of time. It is entirely up to you how quickly you buy out our share, or if you wish to buy it at all.
You may of course have a target in mind for reaching full ownership of your property. We will work with you to set your target monthly payment, consisting of rent plus equity purchase, in order to meet your target. However, you are free to purchase more or less equity than this in any month, according to your needs.
However, there are some conditions you should be aware of before making an overpayment.
If you have additional funds available in any given month and would like to put this towards buying more equity, you have 2 options.
Amend your monthly target amount
Make a one-off lump sum payment
Amend your monthly equity target amount
Your finance agreement with us will show a breakdown of your monthly payments to achieve full property ownership over your desired term. Your monthly target payment is made up of both rent and equity purchase. This is the amount you will need to make each month to receive your rental discount and to fully purchase your home over your desired term. You can view and amend your monthly payments through your dashboard by logging into your online account.
Making a one-off lump sum payment
You can make a lump sum payment towards your home at any time, but you will not receive additional rental discount in any month where you do so. You can view how our rental discounts work here. For lump sum payments £10,000 and over, we will require a 3 month notice period - these will be subject to our usual source of funds and anti-money laundering (AML) checks before being accepted.
You can request to make a lump sum payment any time from the payment settings section of your online account.
Pfida top tip: If you want to make a large additional payment towards your equity purchase, it may be worth doing this as a lump sum if the loss of rental discount for one month is worth less than the additional rent you would pay by spreading the payment over the next few months instead. However, if you want to make a small additional payment you may be better off upping your monthly target payment for a short period instead. You can experiment to see the impact of each option via your dashboard on your online account, in order to make the best decision.
When deciding, you should also bear in mind the following:
You can update your monthly target amount up to once every 3 months*. Therefore, if you change your monthly target amount, this must be for a minimum of 3 months at a time in order to continue receiving your rental discount. After this time period, you may change your payments back again at any time.
Depending on the type of change you wish to make to your payments, we may need to perform a standard source of funds check or additional affordability checks.
Your request to change your payments will be subject to our approval, based on the above.
*When you click to amend your monthly target payment, you will receive a reminder notification of this.
If you have an additional £600, you can pay a lump sum payment towards your home, which will show your equity going up and your term coming down as soon as it’s processed. Or, you can spread it over three months and benefit from your rental discount.
If you choose to spread your top up payment over 3 months, but do not wish to continue making larger payments towards your equity after this time, you will need to revert your monthly target amount back to your original target amount after the 3 months.
Support if you’re experiencing financial difficulty
If you are struggling financially and are unable to afford the monthly target amount, you can opt to reduce it, or make rental payments only for as long as you like through your online account. You are not obligated to make equity payments if you do not want to or cannot afford to.
If you are unable to afford your rental payments, you also have the option of requesting to cover these by selling back some of your equity to us instead (known as your equity buffer). You will need to contact us if you wish to do this. You can reach out to us online by clicking here.
Based on an initial 20% equity ownership, this could cover your rental payments for up to 4 years in times of difficulty. This option could give you some time to get back on your feet if you are experiencing financial hardship, until you are able to start making payments again. However, it will reduce the amount of equity you own and so it will take longer to reach full ownership.
You can find out more information on the equity buffer here.