Overpayment nationwide

KarenBB

That's right it needs one lump of £500 on or after your dd date for a recalculation of payments. A bit tight when your dd is the 25th. I wish I'd seen this thread earlier today as I've forgotten to make an overpayment this month and this would've reminded me - I even walked past a n'wide today (twice).

iceage3

thanks karen
i think i have wasted a whole month,do u get letter straight away or do they send u email,after £500 payment.

KarenBB

You've not wasted a month, your interest has been reduced, t get reduced everytime you make a payment. The computer automatically sends a letter when you've o'pd £500. If you've overpaid in bits and bobs you can still call nationwide and ask them to get the admin team to get July's payment recalculated and they can do that for you. It just won't happen automatically.

Joe_Bloggs

It might be worth checking if there are any penalties for paying more than £500.00 per month ( per mortgage ). As far as I remember I faced a penalty on the whole amount and not just the excess if I made an overpayment of more than £500.00. The penalty was on a sliding scale starting at a few % according to the years/months left on the discounted rate. This charge eventually became zero once you were on the BMR rate.

Later deals may have been more draconian with a fixed percentage penalty. I never risked paying it so I don't know if they actually implemented it.

I face BMR next month. I have opted for a reduced term approach to overpayments and choose to overpay £499.99. This way Nationwide do not have to revise their projection of the end of the mortgage and further report this in a pointless letter every month which assumes that I will not make any further overpayments. The web view of the mortgage account and daily updating of capital changes and interest are excellent.

I have been unimpressed by the current mortgage products on offer by Nationwide in comparison to what I have got.
J_B. (SMR sucks BMR rules).

KarenBB

I keep my o'pmts just under the £500 too. I've reduced term in the past but as they're going to start charging for a term amendment (No charge for the automatic ones when you opay) I'm going to get the term extended before 1st Sept which will reduce required monthly payments but I'll still overpay by just under the £500. We're out of penalties early next year and then we'll be able to pay whatever we want. OH was out of work for over a year quite recently, I want to get required payments low incase he's out of work again.

iceage3

Hello karen

quick update july payment still the same so u was right ,just found out online.

moneysavingaddict07

Hi guys,
I took my mortgage with my OH at the beginning of May this year.

I'm wondering if it makes a difference paying in the £500 overpayment on a certain date in the month? My DD is always ont he 1st of the month, and I can not see the interest amount changing as im making these overpayments.

So rather than bust our gut to get an extra £500 on top of the mortgage amount, at the 1st of every month, would paying the £500 say on the 26th of every month make a difference to when the term would end vs the 1st? Or whether we would end up paying more in interest than the 1st?

Thanks

Yorkie1

If the mortgage interest is calculated on a daily basis, the sooner in the month you overpay then the greater the impact on interest. Not sure about any impact on term reduction.

uzubairu

Yorkie1 wrote: »

If the mortgage interest is calculated on a daily basis, the sooner in the month you overpay then the greater the impact on interest. Not sure about any impact on term reduction.

I always make first overpayment at the start of the month before the mortgage payment even goes in.

Overpayments will naturally reduced the term over time regardless of whether or not Nationwide send you a letter.

I haven't had any trouble overpaying £500+ every month for the past 2 years (on a fixed rate until 2016) and have not been charged a penny in ERCs.
I asked them to use my overpayments to reduce the term.

The online information is good and updates just after midnight each day, so you can instantly see the impact of your overpayments in the reduction of daily interest.

moneysavingaddict07

In my terms and conditions it states.

10. What happens if you do not want this mortgage any more?
Early Repayment Charges. An early repayment charge applies if you want to repay the mortgage early. The charge is calculated using a loan amount of £201,000.00 and is based on 2.5% of the outstanding loan if the mortgage is repaid within 2 years after the mortgage completes. In addition, a Redemption Charge of £90.00 is also payable. Based on the original amount borrowed, a cash example of the early repayment charge that could apply would be £5,115.00 if repaid within 2 years after the mortgage completes.
Therefore the maximum charge you could pay would be £5,025.00 plus fees which are
currently £90.00.

Notes
The early repayment charge shown is the maximum charge you will be required to pay if you repay the mortgage or transfer to another product (unless specifically allowed as part of this product) or make an overpayment of more than £500 over and above the monthly
payment, within the Benefit period.If there is a delay between repayment of this mortgage and the completion of the new loan, any period in between will not reduce the remainder of the Benefit Period. A non-refundable administration fee may be payable to Nationwide when you repay the mortgage.This fee will not be payable if, at any time of this mortgage, you take out a new Nationwide mortgage or you have 10 years or less remaining of the
original term of this mortgage.

11. What happens if you want to make overpayments?
An 'overpayment' is any payment in addition to the normal monthly payment as quoted in section 6 above. Payments of capital included in your overpayments will reduce the amount on which we charge interest from the day after payment. If you make an overpayment of
more than £500 in any calendar month, including repayment of any fees added to the loan, within the Benefit Period you will be charged an Early Repayment Charge, calculated on the entire overpayment amount, as shown in section 10 above. There are no restrictions to
making overpayments after the product Benefit Period has ended.

On my nationwide banking page it says..

Mortgage Overpayment Preference

With a Nationwide flexible mortgage, you can pay off more than your required minimum monthly payment (“overpay”) and build up an overpayment reserve.
With our Standard Mortgage Rate (SMR) and Base Mortgage Rate (BMR) mortgages you can overpay as much as you like, when you like, without incurring early repayment charges. Most of our fixed and tracker rate products enable you to make overpayments up to and including £500 per month without charge. If you overpay by more than this there will be an early repayment charge payable on the entire overpayment amount. Please refer to your latest mortgage offer.
You can choose how your overpayments are treated when you make overpayments of £500 or more:

Pay off your mortgage earlier by reducing your mortgage term.

Reduce your future monthly repayments.

Keep your existing payment and term 'as is'. At the next natural mortgage payment change, i.e. interest rate change, your repayment will be automatically recalculated


If you pay less than £500 the balance of your mortgage will reduce the next working day and you will save interest immediately.
To set how your overpayments are treated on account Mortgage, please select the relevant option above and then click the continue button. Please note that the changes will be made by the end of the next working day.

I dont know how some of you are getting away with paying more than £500/month in overpayments, obviously some people on here would have taken out their mortgage a lot longer than me.

If i select the one of the three options highlighted in purple, could this not change my terms and conditions?