WARNING : Nationwide overcharging on overpayment fee

nineteen

If you have made overpayments to Nationwide - check this:

I made the decision 2 years ago of switching to a 5 year fixed rate (5.63%) martgage with Nationwide - knowing that an endowment was maturing 2 years into that. - yes I know, I know - I know.

(the endowment, BTW has met its target - L&G after 25 years)

Now what to do with the £50000.

Having done the maths, with saving rates the way they are, I'm better off paying the lump sum into the mortgage with the fee ASAP.

So that is what I did - and sure enough, the overpayment fee was £1500! (3%) - which they automatically added to the mortgage.

Then I get this letter that says I can either have the £1500 added to the mortgage - net payment £48500, or pay the £1500 as a separate payment.

ALARM!! ALARM!!

They are suggesting that I find another £1500 or have the fee added to the mortgage.

What they don't suggest is that I could have paid £48500 in the first place and paid £1455 overpayment fee as a separate payment
- the same £48500 off the mortgage, but I still have £45 in the bank.

What they are in fact doing is charging me an overpayment fee on the overpayment fee.

They're getting back to me.

I'm still waiting.

Tim

getmore4less

I thought with nationwide you can overpay by £500pm without penalty.

If you are not overpaying from income you should have held back some of the overpayment and drip fed it into the mortgage this would have saved you £15 each for the cost of a bit of interest.

At 5% on £500 is £25 so around £2pm so 7 or 8 payments worth held back probably another 1 or two if you found a decent interest rate for savings.

VIGILANT22

what a waste of money!

nineteen

Yes, you can overpay by up to £500 a month without fee - that's not the point.

£1500 equates to about 5 months interest on the loan with this fixed rate.

Point me at a savings account that will return enough interest so that I end up paying less than another £1500 in interest overall.

As I said I've done the maths.

It's the £45 that Nationwide are asking for which is wrong - 3% of the overpayment fee - which other people may have already paid without realising.

Get it back.

nineteen

VIGILANT22 wrote: »

what a waste of money!

Yes, paying more interest than you need to on a mortgage should be avoided

VIGILANT22

Why did you take a fixed rate mortgage for 5 yrs, when you knew you had an endowment maturing in 2yrs....why was this not planned for...you obviously didnt take advice......

nineteen

VIGILANT22 wrote: »

Why did you take a fixed rate mortgage for 5 yrs, when you knew you had an endowment maturing in 2yrs....why was this not planned for...you obviously didnt take advice......

I said I know.

At the time (December 2008) - over the variable rate - the savings were far greater than £1500 over the 2 years.


what's done is done - no regrets.

let's get back on track.

The point here is that Nationwide are charging 3% more than agreed.

nineteen

If anyone is interested - Nationwide have confirmed that they have refunded the difference to my account