Natwest 10% Overpayment Limit - How is it Calculated?

mrobsessed

Hi All,

I'm considering overpaying my mortgage with a lump sum but am restricted by a 10% limit per year. If I go over this I'll be hit with a hefty early repayment penalty so want to know details of how this option is worked out.

What date determines the balance that the 10% is calculated from? The date the mortgage was originally activated? Calendar year? Financial year?

If it is derived from the annual mortgage statement at the start of the year is it 'locked' until the next one? For example, if my Mortgage statement in Jan says my balance is £80,000 could I pay £7,999 in December and be safe from penalties?

Does the balnace update after each monthly payment, thus meaning that the 10% figure drops slightly every month?

Any help with this would be appreciated!
Mr O

BlueC

If I were you I'd phone and ask them. Nobody here can give a definitive answer about your particular mortgage product.

mrobsessed

BlueC wrote: »

If I were you I'd phone and ask them. Nobody here can give a definitive answer about your particular mortgage product.

The 10% limit applies to all Natwest Mortgaes, so anyone who has done something similar should be able to help.

Yorkie1

Have you not got your KFI document, or the mortgage offer, from when you took out the mortgage?

What does it say?

y002cjw

Natwest removed some of these restrictions when the economic downturn came. At that time the banks and building societies were more than happy to receive your extra payments, and still are I believe.

I've just checked the most recent statement I have to hand dated Jan 2012. There are definitely no penalties applied, just interest. I am paying £640 a month instead of the required £1400 a month. So effectively overpaying by £500 a month.

I liked the idea of additional monthly payments because once setup you can forget about it. NatWest have a DD claiming the required amount per month. I then have an additional SO making the additional payment. I contacted them on the number below and they gave me the details for the standing order.

UPDATE: The reason I can make additional payments without restriction is because I am on the SVR - standard variable rate.

There is a sentance referring to "an early settlement" charge on my statement. Might be worth giving them a ring to query this type of charge.

You may also have more than one portion to your mortgage to which different rules may apply.

Give them a ring 0121 635 1063 Opt 3 last time I contacted them.

Post back to let us know.

Hope that helps

Vyas

On my NatWest mortgage, its the 10% of the outstanding balance at the beginning of the mortgage year. Call the bank or go to branch to work out the exact amount you are allowed to overpay.