Help! Baffled by making Natwest overpayments

Ferrety_2

I've just started a motgage with Natwest which allows 10% of the total to be overpaid each year, so I want to make small, ad hoc payments whenever I can.

As my bank ac is First Direct, it was confusing finding out how to transfer money: Basically I have to send the money to a 'suspense account' at Natwest, it's then paid into my mortgage.

I spoke to them today to make sure the term would be reduced, rather than the monthly payment each time I overpay. This is where it gets confusing.

Natwest calculate the interest daily, so each small overpayment should help. HOWEVER they told me today unless I make an overpayment of more than £1000, the term won't be recalculated. I can't even pay £500 one week and another £500 the next - it has to be £1000 in one go.

Now, if I make payments of less than £1000, am I still getting benefit from it? i.e. interest is supposed to be calculated daily, so why are they not recalculating when I pay off £500?!

Will I get a statement at the end of the year showing my mortgage reduced by x years as a result of my overpayments, or is something else happening here.

So confused!

jamestap

The TERM won't be recalculated but the INTEREST will be. The term will be recalculated if you make an overpayment of £1k or more, or on the next anniversary of the loan - whichever is sooner.

That's what I was told anyway :-)

Ferrety_2

Phew!

As long as it'll be recalculated eventually, that's all good!