Nationwide question

snowmen

hello,
i'm with nationwide but on the basic svr and overpay every month. If i overpay less than £500 in a month then that amount comes off my outstanding mortgage balance and the monthly payment drops. If I overpay by £500 or more any month then that amount comes off the mortgage balance, the monthly payment stays the same and the term changes effective from 1st of the following month. The overpayment has to be made after the mortgage payment has come out for that month. Also to reduce the term as default you have to ring up and get them to set this up as I think everyone is set up to reducing the monthly payment on event of an overpayment.
I have been with nationwide for 8 years now and they are good for flexibility, using the flexaccount card abroad in cash machines and not getting charged etc, but they do seem to have a problem every time you need to change something or do something different on your account so ring them up and find out what the situation is.
It took me 4 attempts to set up reducing the term as default rather then the payment. It also took 3 attempts to arrange a further advance to pay for our wedding and when they did send the cheque out it was made out to mr and mrs when we weren't getting married till the following week and had separate accounts. And of course they couldnt reissue the cheque until they had received the one we couldnt cash. That was close.
All I am saying is ring them up to make sure and if you think you have got a vague answer then ring them up again at another time of time and speak to someone else.
Also even though they quote an 08457 number to ring the old freephone number still works on 0800 30 20 10 - so that will save you a few pennies too.

Bargain_Rzl

Kantankrus_Mare wrote: »

I get what you mean BR :rotfl:

Only because I was planning on doing exactly the same thing to bring my monthly payments to a level that Im happy with.

I also understood it to mean that every over payment of £500 or more would lead to a reduction in monthly payments.

That's exactly my understanding, too. They just seem to have forgotten to do it on mine, this month and last. And guess what - I've forgotten to bring my account details to work again :doh: so can't ring them yet.

Out of interest, and if you dont mind me asking, what is the amount of your mortgage..........just so i can see if it would be worth me making the over payments.

It's only about £48k at the moment, KM. It's small cos I've got a shared ownership property. I bought a share worth £58k in 2006 with a mortgage of £51k + £699 fee. The plan is that if I can get the mortgage down to under 75% of the original purchase price (£58k x 0.75 = £43.5k) by the time my fixed rate ends, I will not only keep my basic payments down, but safeguard myself against negative equity and hopefully put myself in a position of being able to get a 75% LTV fixed rate in future. I only started overpaying in June, as my savings had been beating my fixed rate prior to that - and on the day after the fixed rate ends and the £500-a-month limit is lifted, I'll be pouring most of what's left of my savings into it.

Kantankrus_Mare

Your fixed rate is good!! My mortgage is only 31,000 and on the SVR. We pay £360 a month but would love to get this down to less than £300 a month.

Have ten years left to pay off.

Bargain_Rzl

My fixed rate is currently 4.89% (it's a 25-year repayment mortgage, though I'm looking to get rid of it as early as possible so as to free me up to make a decision whether or not to purchase the remaining share of my flat).

Last time I looked, the Nationwide SVR was about the same as the fixed rates they were offering, so I'm not committing myself to another fix straight away. I also looked at my list of minor financial goals (i.e. things I'm saving up for) and realised that I don't have any specific targets until 2010, so I figured if I'm going to concentrate on overpaying, now's the time to do it while I'm not saving for other things.

Having said that, if I can find a favourable 2-year deal in the early part of next year, I'll take it - I don't want more than 2 years because I have an investment due to mature in 2011 which should realise at least £10k, and will go straight into the mortgage...

Bargain_Rzl

I have the answer. And I didn't even need the customer service man to tell me, because it suddenly popped into my head while I was asking him the question

Nationwide deal in calendar months.

My standard monthly payment goes out on 27th. When I overpaid £500 in June, it went in around 29th of the month, so what their system saw was £298.92 (standard monthly payment) + £500.00 (overpayment). So the system saw a £500 overpayment and reduced my monthly payment to £295.84.

When I overpaid £500 in July, I did so around the 10th of the month. So the system saw the first £295.84 of that as my standard monthly payment, and the remaining £204.16 as overpayment. Then when my DD was taken for my standard payment, it saw it as another £295.84 overpayment, so I've effectively made a £500 overpayment but in two separate chunks. It therefore didn't trigger a recalculation in my monthly payment, and is coming off the term instead.

This month (August) I have already made my overpayment, which will again have been treated as standard payment + £204.16 overpayment, and my standard payment which goes out next week will again be treated as a second chunk of overpayment.

The CS advisor said that my reasoning was correct and that he could put in a request for the monthly payments to be reduced instead, but as it's currently to my advantage to continue the way things are, I said I'd leave it until my fixed rate ends to change it.