Nationwide Overpayments

Anon

I read somewhere (but cannot for the life of me find it!) that it is/may be possible to reduce the number of years remaining on the mortgage and thus increase the regular monthly repayment payment to pay it off in that time (plus flexibility to still be able to overpay £500 per month). Does anyone know anymore about this, and could you (if need be) increase the term again without incurring the penalty?

Many thanks

Anon

Joe_Bloggs

Z1ppy as we both know the Nationwide operate a 5-4-3-2-1 scheme of proportional percentage penalties on mortgage overpayments. The closer you get to the end of 'the mortgage discount period /deal ' then the less the penalty is. When you eventually get to SVR or to use Nationwide's terminology BMR then you can over pay what you want.
J_B. They also count the days within the years to make it a fair sysrem.

Z1ppy_2

Many thanks for everyones comments,

managed to speak with someone very helpful at Nationwide this evening who answerd questions in the same way as above!

now i need to talk with my IFA to crunch the numbers to see if its worth making large overpayment on the one mortgage with higher fixed rate (still have 18 months to go on that one) and see if the interest saving ofsets the fee or to put it into the flat (fixed ends in may) and all the possible tax implications that go with that as its rented!

we will be dropping to the SRV after may but if rates start to rise, we will need the money to put some equity back in the place and get a decent rate!

again, thanks for everyones help!

JayZed

Anon wrote: »

I read somewhere (but cannot for the life of me find it!) that it is/may be possible to reduce the number of years remaining on the mortgage and thus increase the regular monthly repayment payment to pay it off in that time (plus flexibility to still be able to overpay £500 per month). Does anyone know anymore about this, and could you (if need be) increase the term again without incurring the penalty?

Many thanks

Anon

Anon, see this discussion:
http://forums.moneysavingexpert.com/showthread.html?t=1444917

Robert_Sterling_3

Joe_Bloggs wrote: »

Z1ppy as we both know the Nationwide operate a 5-4-3-2-1 scheme of proportional percentage penalties on mortgage overpayments.

I know that they had that system some years ago.
I think in more recent years they have adopted a constant rate of 3%.

Anon

Robert_Sterling wrote: »

I know that they had that system some years ago.
I think in more recent years they have adopted a constant rate of 3%.

The mortgage we took out last year is "3% of the amount repaid" for all five years of the fix.

Anon

Robert_Sterling_3

Same here Anon.

Anon

Is anyone else considering bailing out of their Nationwide fix early to switch to one of the current lower rates (if possible) with another provider or staying put? I outlined this in a different thread (http://forums.moneysavingexpert.com/showthread.html?t=1459063) but no responses so would be interested to hear other's thoughts. It is tempting (though going to be expensive in the short term ... and possibly the long term knowing my luck if rates suddenly shoot up after getting out of the fix).

Many thanks

Anon

ab7167

zippy,

don't forget that the £500 limit is per mortgage account - so your limit is actually £1000 as you have 2 accounts. We are in this exact same situation, and when we re-fixed our rate a couple of years ago our overpayment pot remained intact.

It might be cheaper to overpay £1000 from your £40k pot each month rather than foot the penalty.

Also consider that if you are on BMR there are no limits to overpayments, this also applies in the last month of any fixed rate deal to encourage overpayments between deals. i.e. the penalty runs out 1 month before the fixed rate does, if there are only a few months to wait it would definitely be worth waiting until the "grace period" kicks in to make the overpayment.

Alex