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  • FIRST POST
    • Dachug4
    • By Dachug4 11th Sep 17, 4:29 PM
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    Dachug4
    No Early Repayment Charge in final month of deal?
    • #1
    • 11th Sep 17, 4:29 PM
    No Early Repayment Charge in final month of deal? 11th Sep 17 at 4:29 PM
    Hi,

    I'm in the final couple of months of my current mortgage deal with Nationwide and looking to pay off a small lump sum before moving to my next deal. The advisor told me that if i wait until the final month of my deal, i can make an overpayment of any amount (not restricted to 10%) without incurring any early repayment charge.

    I can't find any terms and conditions that state this and want to confirm this is the case before making a large overpayment.

    Has anybody heard of or done this before? I'm on a fixed rate 3 year deal at the moment.

    thanks
    Dave
Page 1
    • glosoli
    • By glosoli 11th Sep 17, 6:40 PM
    • 673 Posts
    • 387 Thanks
    glosoli
    • #2
    • 11th Sep 17, 6:40 PM
    • #2
    • 11th Sep 17, 6:40 PM
    There are a few lenders which operate this practice to increase customer retention (i.e they will waive the early repayment charges up to three months early if you take a new product out with them). It sounds normal to me.
    • Dachug4
    • By Dachug4 11th Sep 17, 7:16 PM
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    Dachug4
    • #3
    • 11th Sep 17, 7:16 PM
    • #3
    • 11th Sep 17, 7:16 PM
    That's good to know. Thanks for your reply
    • Lilla D
    • By Lilla D 12th Sep 17, 9:33 AM
    • 316 Posts
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    Lilla D
    • #4
    • 12th Sep 17, 9:33 AM
    • #4
    • 12th Sep 17, 9:33 AM
    While I agree with glosoli that some lenders let you change to a new deal with them within the last 3 months without paying an early repayment charge (ERC), and it's even true for Nationwide as well, I've just double checked it with them and unfortunately they are still restricting you to a 10% overpayment per annum. In other words, if your mortgage balance was, say, £200k and you'd like to switch to a new Nationwide deal but only for £150k, then you'd have to pay the ERC for £50k overpayment amount - £20k allowance = £30k.

    And, of course, if you switch to a different lender's deal even the day before your current deal expires, then you'd pay the ERC on the whole outstanding balance.
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • getmore4less
    • By getmore4less 12th Sep 17, 9:37 AM
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    getmore4less
    • #5
    • 12th Sep 17, 9:37 AM
    • #5
    • 12th Sep 17, 9:37 AM
    What the advisor probably means is that you can switch deal at the end and make the overpayment at the same time.

    Clarify with another advisor the process to make sure that happens without any ERC.
    • Dachug4
    • By Dachug4 12th Sep 17, 5:07 PM
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    Dachug4
    • #6
    • 12th Sep 17, 5:07 PM
    • #6
    • 12th Sep 17, 5:07 PM
    Thanks for your replies. Lilla thanks for checking and those were my initial thoughts. I did have reservations about the advice given. I will definitely be double checking before going further. Yes it's possible they meant at the end of the current deal. I had just never heard of it before.
    • Dachug4
    • By Dachug4 13th Sep 17, 7:01 PM
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    Dachug4
    • #7
    • 13th Sep 17, 7:01 PM
    • #7
    • 13th Sep 17, 7:01 PM
    So I phoned Nationwide and to my surprise they confirmed that my advisor is right. In the final month of my mortgage deal I can make an overpayment over the standard 10% threshold. No penalty ERC will be charged.

    I'm happy that both Nationwide staff have confirmed this and will be paying off a lump sum next month before my next deal.

    Obviously worth checking with your lender first if you're thinking of making overpayments.
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