Dynamic capital overpayments...??

Gimcrack · 27 July 2010 at 5:17PM

Hi everyone - my first post, so here goes.

Having been a long-time Nationwide (and prior to that Anglia!) customer, I was hoping to see my deals out with the same company however when trying to make a capital repayment on an Interest-only mortgage account over the internet recently, I couldn't understand why depsite having specified their account number, sortcode and my acct number as reference that the payment hadn't reduced the capital owing even though I had allowed a couple of weeks for any "clearance" or adjustment to take place. In fact the amount owing seemed to be MORE than the original loan, which I thought would have been impossible on an interest only deal??!!

Anyhow, I called customer services only to be told that you cannot make capital repayments via the internet and either have to send a cheque to customer services in Northants with a covering letter, explicitly telling them to apply the payment to reducing the capital OR find a branch and do much the same. They said that "the system" treated any e-payment as offset agains interest but they couldn't explain to me (in terms I could understand at any rate) how on earth the balance actually went up!

To be fair, they put it right and wrote to me confirming that the capital had now been reduced as per my instruction but blimey, what a song and dance.

So, the question is can anyone reommend a lender that offers a full internet service with which to adminster your account(s) in that ANY ad-hoc payment will show immediatley (or as close to immediate as possible) as a reduction in the capital amount owing.

Despite all the supposedly helpful advice re overpaying, they actually make it quite hard to reduce and their default position of reducing interest is a bit "sharp" IMHO.

Thanks for reading.

Rob

Radionotme · 28 July 2010 at 8:41AM

I've no idea why that happened or why you were told what you've said above, but I'm with Nationwide with two interest only mortgages and do exactly what you're trying to do with no issues.
When you log into the account, you can see the payments you've made each month, and then you can see the interest accrued over the course of the year and the outstanding capital.
When I make an overpayment, it usually takes around two days, but the payment then appears in the appropriate month and the total outstanding amount is reduced accordingly.
I go in and check this every day and maintain a record, and I've also been able to see that the daily interest amount drops after any payments.

I should also say that any overpayments are done over the internet, either from my Nationwide Flex Account, or my Halifax Current Account.

One thing you say though, is that you can't see how the balance can go up on an interest only mortgage - well, if no payments are being seen to be made for some reason, then the interest will be added to the loan, increasing the overall balance, and this will happen on a daily basis (although the interest is only compounded on a monthly basis)

Gimcrack · 28 July 2010 at 5:08PM

Thanks for the reply - maybe I should try again. I guess it's possible that the guy I spoke to didn't cotton on to the fact it was interest only.

That said, in these days of the Faster Payments scheme, I Would still like to see a more slick / dynamic service from some provider that enabled the customer to see the effects of ad-hoc payments as they happen - maybe I need a Current account mortgage where it's shown as a whacking great overdraft???!!

Cheers

Rob