About to go onto Nationwide SVR

humfer

Finish a 2 year tracker this week and will go to their variable mortage which not being allowed to be any higher than 2% above BR will mean I will be on 2.5%. Had a letter the other week confirming my revised payment, but just wondering whether my overpayments of £500 that I have been paying over the last 2 years will continue to be taken. Anyone know?

[Deleted User]

How were your overpayments "taken" previously?

humfer

They were taken at the same time as the direct debit. There is no standing order, and I had to request in writing Nationwide taken the extra payments so assuming they automatically add £500 to the dd each month

[Deleted User]

The only way to be sure is to ring and ask them.
Alternatively, you could always wait and see what happens. If they fail to take the extra £500 in the first month, you could always arrange to overpay by an extra £500 in the following month. Since you are now on the BMR, there is no longer a £500 limit on monthly overpayments.

Gorgeous_George

At 2.5% I'd be tempted to stop overpaying and save instead.

If you haven't planned to use your ISA allowance in 2010/11 this may be a good time to do so. For a couple the cash ISA allowance will be a total of £10,200 - more than enough to feed your potential overpayments into. You can earn 3.5% easily. Tie it up for 5 years and 5% is available - that's double what you will 'earn' by overpaying.

Nationwide want you to overpay. They'd prefer you to move products and lose the +2% guarantee. I'd do neither - but you must do whatever is right for your circumstances. However, it is best to do so having considered all the options properly.

Good luck with whatever you decide.

GG

[Deleted User]

Gorgeous_George wrote: »

If you haven't planned to use your ISA allowance in 2010/11 this may be a good time to do so. For a couple the cash ISA allowance will be a total of £10,200 - more than enough to feed your potential overpayments into. You can earn 3.5% easily. Tie it up for 5 years and 5% is available - that's double what you will 'earn' by overpaying.

I agree in part but would be wary of tying up for 5 years at 5%. The OP's mortgage rate could easily go higher than this during that time period. Personally, I wouldn't tie up for more than 12 months at a time.

Gorgeous_George

CR10 wrote: »

I agree in part but would be wary of tying up for 5 years at 5%. The OP's mortgage rate could easily go higher than this during that time period. Personally, I wouldn't tie up for more than 12 months at a time.

Fair point. It all depends where you think interest rates will go. Personally I don't think base rates will have averaged 3% for 5 years.

If rates did rise rapidly, the ISAs could be cashed in at a cost of some interest (270 days in one case).

GG