Beware of a Catch with Overpayments on Nationwide Mortgages

Altarf

If you overpay £500 (or more if allowed) unless you instruct Nationwide otherwise they will use it to pay off the capital but leave the term of the mortgage the same and reduce the payments from the next payment onwards. If you want them to use it to pay off the capital and reduce the term of the mortgage (leaving the payments the same) you must specifically instruct them to do so, but you can give them a standing instruction.

Less than £500 and they will use it to pay of the capital, but they leave the term of the mortgage the same and do not adjust the monthly payment immediately. They will reduce the amount of the monthly payment either if the interest rate changes or, depending on the mortgage, at the end of the year. Although they do not adjust your monthly payment straight away, as they calculate interest daily you will not be paying interest on that capital from the day you make the payment, and would be taken into account on the annual statement.

Even if you have overpaid less than £500 on a single occasion, but more than £500 over a period of time, they may be willing to reduce the term if you ask them. If they are not willing to do this, and you want the term reduced, save up the less than £500 amounts until you have £500, and overpay them in £500 lumps.

moneysavingwannabe

Thanks!! That is clearer:D

Ok another question:

We have a fixed rate for 5 years - we are 2 and a half years into it.

When the fixed rate ends do we have to pay a penalty to transfer the mortgage somewhere else??

saabu

Hello,

Greetings!

I am new member to this forum.

I am planning to take a 5 year Fixed Mortgage with Nationwide at 5.28% for a 10 year term. The mortgage arrangement fee is £499.00. This is for a re-mortgage [leaving Halifax after 2 years].

My questions to the learned members are:-
1. If I make overpayments of £500.00, which is the better option? :
Leave the monthly repayment same & bring down the number of years
[ii] Bring down the monthly repayment and keep the number of years the same.

2. How do I set this [the way what my overpayments are supposed to do] up and what is the default?

3. What will Nationwide actually charge me for leaving it after 5 years by way of fees [considering it is a 10 year term with 5 years fixed].

4. Is there a way I can get NW to send me statements as soon as I make an overpayment?

5. What is the best way to make overpayments? :
Online by setting up a standing order or Direct Debit
[ii] Paying at a Bank
[iii] Postal.

Look forward to your help with my queries.

Taking this opportunity to wish the members a Very Merry X-mas & A Happy New Year.

Regards,

Saabu.

Altarf

moneysavingwannabe wrote:

Ok another question:

We have a fixed rate for 5 years - we are 2 and a half years into it.

When the fixed rate ends do we have to pay a penalty to transfer the mortgage somewhere else??

Probably not, but for a definitive answer you would need to read the T&Cs of your mortgage.

Girl_least_likely_to

Can I ask how I would overpay my Nationwide mortgage? I am registered with their online banking but only with the mortgage product. I have my current bank account with Barclays and I am happy to keep it there. Is it a case of phoning Nationwide up when I want to make an overpayment, or going into a branch with cash/cheque, or can a payment be sent from my Barclays account via internet? What does everyone else do?

Altarf

Girl_least_likely_to wrote:

can a payment be sent from my Barclays account via internet?

Yes, you just need to get the sort code and account number from Nationwide that they want the payment made to, and quote your mortgage account number as the reference.