Nationwide Overpayment Percentage

stevie888

Sorry ifthis is a frequently asked question however I couldn’t find a topic thatconfirmed my answer fully.

We arelooking to borrow £217,000 from Nationwide on a 5 year fixed rate of 2.99%
I read theterms that we are able to overpay up to 10% annually. So in this example after the first 12 monthswe could over pay up to £21,700 in a lump sum without any charge.

Can theexperts on the forum confirm I am right?
Thanks in advance, Steve

holly_hobby

Yes thats correct, but before you do make the payment I'd give them a tinkle to ensure they do process as per your mge T&Cs, as ERC free.

Its typically 10% of the current outstanding balance, so take this into account for any future lump sum reductions and if you are on a C&I asis - as you don't want to inadvertently incur an ERC due to exceeding the 10% allowance.

Hope this helps

Holly

Bufger

And its not just on lump sums. Its a restriction of 10% over the year. ie if you overpaid £21,700 in a lump sum and 1 month later overpaid by £1 then you'd incur the penalty.

Mine runs from 19th November each year until the fix ends. Its worth keeping a spreadsheet of overpayments so you're aware of where your limit is.

holly_hobby

Of course the 10% ERC free allowance relates to a overpayments over an entire and single mge yr, not per payment or per month or whatever else.

Hope this helps

Holly

pollyanna24

I always thought that Nationwide let you overpay without penalty up to £500 a month if you were on a fixed rate, but maybe they've changed their rules.

lion-o

@pollyanna24 That was before May I think, it's recently been changed to 10% of the loan.

pollyanna24

Ooh, interesting. Thanks very much for that. I went onto Nationwide's BMR in May, but if ever I decide to refix, this will be very useful.

marlot

I also found that you could alter the term without triggering a penalty. So when I had a pay rise and wanted to pay the mortgage down quicker, I reduced the term from 15 years to 12, to 10, etc. This bumps the payments up and as long as you don't go below the length of the fix doesn't trigger a penalty. Or at least, it didn't for me.

I was then able to use the 10% on top - when I could afford it.