Nationwide overpayments

smcqis

Fixed mortgage, can overpay up to £500 per month without ERC but what exactly does the following mean (from Nationwide website)?

"If you overpay by exactly £500, we will reduce your payment from the following month.
If you overpay by less than £500, your monthly payment will be reduced at the end of your fixed rate period. Your interest is calculated daily, so your overpayment will still reduce your balance immediately and you'll start to be charged less interest, but your monthly payment won't reflect this straight away."

If i chose to overpay I would want my monthly balance to remain the same but reduce the term...?

fluffysox

Whenever you make an OP over £500, Nationwide recalculate your mortgage and send out a letter telling you the new reduced monthly payment amount that would pay off your mortgage within the original term. Overpayments under £500 don't trigger a recalculation or a letter- even if two months on the run you OPd £499. This reduction in payment is the default / automatic response of Nationwide. I have left my Nationwide mortgage set up in this way because I can always OP more by internet banking as my regular direct debit decreases and I wanted to reduce our basic bills to a level where either of our salaries would cover direct debits. However if you prefer to reduce term- just ring Nationwide up and they'll do this instead- again sending you out a letter whenever you OP £500 within a month.

smcqis

I would prob want to OP by 500 (not a penny more) some months, to get my term reduced I would have to tell them first as they would automatically reduce my monthly payments? Im happy with our monthly payments so want to reduce the term now, if i was to overpay in a nationwide bank, would it be just a matter of telling them to reduce the term or is there an official way of doing it?

B'stard

I have done the same, to lower the term of my nationwide mortgage.
You can do this online by sending them a message via your savings/mortgage account. Below is the message I sent, and received back.

Also I posted a thread about Nationwide over payments which may be of use to you - https://forums.moneysavingexpert.com/discussion/3191276

--- Original Message ---
From: "****" <*****@bbm.tux>
Received: 13/03/10 16:22:36 o'clock GMT
To: "Customer Services" <customer.bbm.hidden@nationwide.co.uk>
Subject: ***** - Mortgage Overpayment Preference Request

Please set my overpayment preference to Reduce term for my mortgage account number *****

Unique Tracking Number: ****

Dear Member,

Thank you for your message.

I have amended your account so that any future overpayments of £500 or more will automatically reduce the term of your mortgage.

This will only be activated if your overpayment is made after your monthly mortgage payment has been received.

AHAR

B'stard wrote: »

You can do this online by sending them a message via your savings/mortgage account.

I can select the preference directly within online banking.

Seamonster_2

Sorry to dig up an old thread, but I wonder if someone could clarify a point for me. I've been overpaying my (BMR) Nationwide mortgage by £300 per month for a couple of years now. NW have never adjusted the payment to reflect this, presumably because the interest rate has never changed in that time.

I would like to have the term reduced. Am I correct in thinking that as soon as I make one £500 payment, they will immediately reduce my term (assuming that I have chosen that option within online banking), and that the reduction will reflect all the overpayments I have made to date?

Joe_Bloggs

That's the way I have found things.
This new statement of a new 'final' repayment date is still just a prediction assuming continued regular repayments as it does not take into account future overpayments that would further reduce the term/final repayment date.
J_B.

KarenBB

Seamonster wrote: »

Sorry to dig up an old thread, but I wonder if someone could clarify a point for me. I've been overpaying my (BMR) Nationwide mortgage by £300 per month for a couple of years now. NW have never adjusted the payment to reflect this, presumably because the interest rate has never changed in that time.

I would like to have the term reduced. Am I correct in thinking that as soon as I make one £500 payment, they will immediately reduce my term (assuming that I have chosen that option within online banking), and that the reduction will reflect all the overpayments I have made to date?

Yes they will. As soon as you pay £500 or more you can chose to have the term or the payments reduced. If you notify them in advance to set the preference for term reduction or do it via online before you make the overpayment it will automatically reduce the term to keep the payments as they are so it will take into account all o fthe overpayments you've been making of £300.

While you've been overpaying by £300 a month the amount of interested you've been charged each month will have been reduced but not your payments, so in effect you were taking a little more off the capial each month than you would have been if you hadn't overpaid.

Seamonster_2

Thanks for the helpful replies. Glad to hear that things do indeed work as I'd hoped.