Nationwide Mortgage Overpayments

peterjbell

A non publicised fact is that if you are in a fixed term mortgage deal, in the last month of that fix you can overpay your mortgage by any amount without the usual financial penalty. Under the normal terms of the fix you are limited to £500 per month overpayment. I have just overpaid mine by £10k before going into another 2 year fix.

They don't advertise this as they don't want everyone doing it but if you ask them they will confirm this is the case. It probably appiles to variables too but best to ask Nationwide.

Happy overpaying...

UK007BullDog

Interesting. Did they tell you this before or after you told them you wanted to fix again?

Robert_Sterling

My daughter had a 5 year fix at 5.9%
The redemption penalty was shown I think as
5% year 1
4% year 2
3% year 3
2% year 4
1% year 5
The penalty only applies to the amount you actually pay off.
On closer inspection I found that the redemption % applied to the repayment amount decreased by one twelvth of one percent each month and the reduction took place on the 1st day of each month.

This explains why the penalty in the final, or 60th, month in this case, is 0%

My daughter had spare cash. She could get about 5% tax free on the cash.
But since the mortgage rate was 5.9% she was better off making a lump sum repayment AND paying the penalty. ( To that extent it was not realy a penalty at all since she was better off anyway as a result of the repayment).

payless

They moved over to "level" redemption penalties (ERCs) some months back for new fixed/ variables