Overpaying Mortgage Advice

gkb_2

We have come to the end of our fixed rate of 5.29% and due to the Nationwide now valuing our house at approx 80% of what we paid for it 2 years ago they are not willing to offer another fixed rate as according to them we only have 4% equity now

As a result for now this is good as our rate has dropped from 5.29% to 2.5% (2% above base) which results in a saving of approx £250 per month, rather than just spend this we want to try and continue to pay this amount against the mortgage thus reducing the outstanding amount for when the rates rise.

Question is, our mortgage is half repayment and half interest so is there any benefit to putting the overpayment against one type particularly provided we are able to overpay all to one and is there likely to be any restriction as to what we can overpay as we are on the SVR ?

Many thanks

TOPAZ_2

Hi gkb
I am in the same situation - now you are on the SVR of 2.5% you can overpay as much as you like - there is no restriction.

I send them extra whenever I want to - all you have to do is ask them for the sort code and account number that you need to send the payment to, and dont forget to include your mortgage account number in the relevant box - usually called additional information. (it goes to a central account and then the additional informatio of your account number, redirects it to your mortgage account)

Once you have made the first payment, you can give them a call and ask them to keep your standard payments the same - therefore reducing the term. Otherwise they will send you a letter after each payment of over £500 and reduce your next months standard payment. keeping the term the same. (I let them send me a letter each month, reducing my minimum payments, but I keep increasing my overpayment by the reduction in my standard payment. This means the total amount I pay stays the same, and I have the benefit of the standard payments reducing, should I need to take advantage of this)

If the interest rates are the same on each of your mortgage accounts - then it makes no difference whatsoever, which account you send the payments to.

I Hope this helps
If you need more help - then the Mortgage Free Wannabe board is probably a better place to ask

Topaz

samnorris2

gkb wrote: »

We have come to the end of our fixed rate of 5.29% and due to the Nationwide now valuing our house at approx 80% of what we paid for it 2 years ago they are not willing to offer another fixed rate as according to them we only have 4% equity now

You can get Nationwide mortgages based on a LTV of 95% so if you drop onto the BMR of 2.5% and overpay the extra and enough to bring you LTV down to below 95% then you may be able to go back to them and get your deal.

I'm with NW and my 2 year fix is up at the end of August. I was trying to lock into a 3 year fix at 4.98% and called them last Friday to book and pay the fee. They said they would send out the paperwork and give me a call in 3 days to confirm the reservation fee. They never did and still haven't called
During the week I checked and the 3 year fix was back down to 4.49% - so I was glad of NW's current customer service inefficiencies.

However now I'm thinking I might just sit out the 2.5% rate. Nationwide know it's a steal, that's why they changed to the SMR currently at 3.99% and no maximum cap of 2% about BoE rate.

I'd sit tight if I were you, overpay what you can each month, more than the £500 max, if you can after your tie in period ends. Then if you feel you need to lock into the security of a fixed deal then. From some other thread I've read the rates will not jump massively if at all before the end of the year.

However, the decision as always, is yours. Good luck

Sam

TeddyBear_2

samnorris2 wrote: »

You can get Nationwide mortgages based on a LTV of 95% so if you drop onto the BMR of 2.5% and overpay the extra and enough to bring you LTV down to below 95% then you may be able to go back to them and get your deal.

I'm with NW and my 2 year fix is up at the end of August. I was trying to lock into a 3 year fix at 4.98% and called them last Friday to book and pay the fee. They said they would send out the paperwork and give me a call in 3 days to confirm the reservation fee. They never did and still haven't called
During the week I checked and the 3 year fix was back down to 4.49% - so I was glad of NW's current customer service inefficiencies.

However now I'm thinking I might just sit out the 2.5% rate. Nationwide know it's a steal, that's why they changed to the SMR currently at 3.99% and no maximum cap of 2% about BoE rate.

I'd sit tight if I were you, overpay what you can each month, more than the £500 max, if you can after your tie in period ends. Then if you feel you need to lock into the security of a fixed deal then. From some other thread I've read the rates will not jump massively if at all before the end of the year.

However, the decision as always, is yours. Good luck

Sam

Hi Sam,

As you've probably gathered from the "Nationwide BMR or fix - how to decide? Thoughts please" in this sub-forum, the Nationwide is a contentious subject for me at the moment.

I had an interesting conversation with two IFAs yesterday about my predicament of needing to extend my borrowing and to gauge their feeling as regards what the Nationwide was prepared to offer.

One offered the theory that the Nationwide (amongst others) tends to push new products because they represent new sales and are recorded on their statistics as such, while the other was horrified that they want to charge a £995 mortgage arrangement fee for a two or three year tracker mortgage (for the sum of £5,000) to the point that he did not believe it and wanted a copy of the mortgage illustration.

This is why I am of the view it is so attractive for them to offer the same deals to existing and new customers alike because new customers feel they are not losing out and are likely to be attracted to the Nationwide on this basis, although existing customers (like you or me) may be left wondering what exactly the incentive is to remain with the same lender for 25 years.

Longer term, I shall be investigating the mortgage marketplace to see what deals are available and if one exists which is more preferential to the one I currently have and offers greater flexibililty for home improvements, etc, then I shall have no hesitation in jumping ship from the Nationwide, and others who have been Nationwide customers for years, who feel their loyalty has counted for nothing should be unafraid to do the same.

TeddyBear

SKIPPY

gkb wrote: »

Question is, our mortgage is half repayment and half interest so is there any benefit to putting the overpayment against one type particularly provided we are able to overpay all to one and is there likely to be any restriction as to what we can overpay as we are on the SVR ?

I am in the same situation, personally i overpay on the interest only part as this is the bit that probably wont (what am I saying - WONT ) be covered by the endowment policy :mad:. I can overpay as much as I want to on my SVR mortgage and presume most BS would be the same.