Nationwide Mortgage Early Repayment Fee - can they charge extra for paying the fee?

monkeys17

Hi,

New here, seems like The Place To Come for answers!

I have recently overpaid quite a large amount on my Nationwide mortgage :j. I'm in the fixed interest period so I have to pay an early repayment fee, which is what I expected.

I got a letter confirming the fee. It says the fee has been added to my mortgage account, but interest will not be charged on this fee during this calendar year. It goes on to say that I have two options:
(1) Do nothing, in which case the fee will be added to my mortgage balance.
(2) Pay the overpayment fee (either at the branch or by post).

I went into my local branch to pay the fee, but they told me if I did this they would charge me an early repayment fee on it, as I've already overpaid the maximum 'free' amount (£500) this month. They advised me to wait until the next month and pay it off then.

I'm confused, as the fee doesn't seem connected to the balance due on the mortgage unless I 'do nothing'. Can anyone shed any light on this? I tried arguing quite hard with the guy advising me, but he didn't seem to understand my point of view!

I ended up walking away frustrated, as the letter seems pretty clear to me. Paying a fee on repayment of a fee seems daft to me!

Thanks in advance for any help!

bigadaj

Why did you pay over the free amount, this would normally be 10% wouldn't it?

Surely it would be better to save or invest anything above the maximum fee free amounts, as you would pay the mortgage off in less than ten years in this case anyway.

kingstreet

It isn't 10% with Nationwide. It's £500 per month.

littlemrtinkle

just change the term to 12months etc your monthly rate would be higher. Then pay the money off this way and avoid the early repayment charge this is what i did.

monkeys17

Thanks for the replies so far.

kingstreet is correct, the free amount is £500 per month. To explain why I'm doing this, savings rates are really poor at the moment so to me it makes sense to reduce my mortgage due to my fixed rate being high (4.89%).

@littlemrtinkle - are you with Nationwide? If so, I had no idea you could do that!

My question still stands though. Say I wanted to pay off a large amount, e.g. £50k, in one lump sum, I don't think I could reduce my term enough to avoid an early repayment fee.

Anyone else have an opinion on this?