Moving to BMR and over paying

burtoc

Hi

Wonder if anyone can help?

I am "finally" moving to Nationwide's BMR as at 1st October and plan to make the same payments that I currently pay, therefore over paying by £150 per month.

I have 4 seperate mortgages with Nationwide and I was wondering would it make more sense to pay each mortgage off at the same rate I currently do or to pick one of the mortgages and over pay the £150 into that one (the smallest mortgage is about £4k)

I don't want Nationwide constantly changing my payments because I am over paying but just wondering if either option has any hidden benefits/problems

Thank you for your help

SimbaSimon

It depends...

The regular payments can only be changed if you over pay £500 to one of the mortgages in one single month. Otherwise if you overpay by £499 the payments will stay the same each month and you'll just be paying a bit more of it off and shortening the term by default.

If you over pay £500 or more to one account you can choose to keep the payments the same like above and shorten the term of the mortgage, or have your payments recalculated each month so the regular payments would go down, or have the payments recalculated each time the interest rate changes. You'll need to either phone or use your online banking to set this setting.

Hornet_WFC

I am in the same position on the 1st, so if I pay Nwide £100 per month extra will they never recalculate the repayments? I thought I read somewhere (not sure though) that less that £500 is recalculated when the rate next changes??

Thanks

SimbaSimon

Hornet_WFC wrote: »

I am in the same position on the 1st, so if I pay Nwide £100 per month extra will they never recalculate the repayments? I thought I read somewhere (not sure though) that less that £500 is recalculated when the rate next changes??

Thanks

Doesn't mention it on the nationwide website. http://www.nationwide.co.uk/MortgageStatement/flexible_features.htm

• save interest straight away - any money you overpay is deducted from your balance the next working day
• pay your mortgage off earlier (if you have a repayment mortgage).
• borrow back the money that you have overpaid at any time
• reduce your monthly payments (underpayments) in the future

My interpretation of it is by default you'll finish your mortgage earlier when overpaying unless you want to underpay after you've overpayed. :rolleyes:

KarenBB

From Nationwide's website after searching overpay mortgage
For repayments of less than £500

Overpayments of less than £500 will not immediately affect the monthly payments. At the next interest rate change (when your monthly payments are amended), these will be recalculated to take into account any overpayments made.

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So payments will change as a result of the next rate change as the payments will be calculated on the outstanding balance.

I can't see it makes any difference if you pay the £150 off one account or split it over more than one. The only thing would be that you can borrowback any money that you overpay and if you needed it and it was all paid to one mortage account it would be a simpler letter to write to ask for it back.

If you overpay by £500 as a one off payment both the interest and the payment will be recalculated but you can ask nationwide to set your account to reduce the term not the payment if you overpay by £500, keeping the payments the same and paying the mortgage off sooner.