Mortgage Overpayments

starM

Hi,

I recently fixed my Nationwide mortgage at a rate of 2.29% - Balance outstanding £50250. Original advance amount was £70800.

1st question - In the mortgage conversion offer it says I can overpay 10%. Is this 10% of the original advance £70800 or current balance £50250?

Also I run overpayment calculator on MSE.

Current repayment of 17 years £297
My monthly overpayment £500.00

MSE showing:-

0 £50250 with overpayment £50250
1 £47,804 with overpayment £29,725
2 £45,301 with overpayment £8,724
3 £42,741 with overpayment £0

Is that showing within 3 years the balance will be cleared? How is that possible even without interest £797 over 36 months comes to just £28692?

Thanks
MS

quicklee99

It is usually 10% of the balance at the beginning of the year. So for arguments sake say you owed 50K at 31st dec 2013, during 2014 you could make an over payment of 5k.

You need to check with your provider though, some companies do it as 10% of your normal monthly payment rather than 10% of balance at beginning of year, there is a big difference.

Not sure what you have done wrong with the calculator as based on 17 yrs to pay 50250 with a monthly payment of 297. Plus a monthly over payment of £500 (if even allowed without incurring ERC) would take 6 years to clear.

Stan11

Does anyone know of any mortgage providers that offer more than a 10% overpayment?

I am looking to overpay by around £500 a month.

rockabelle

I have an HSBC lifetime tracker which allows as many overpayments as you want, with no limit as to the amount. No idea about any other mortgages though (my old one with the Woolwich was also totally flexible, but since I paid .3% below base, I'm not sure it still exists!)

starM

quicklee99 wrote: »

It is usually 10% of the balance at the beginning of the year. So for arguments sake say you owed 50K at 31st dec 2013, during 2014 you could make an over payment of 5k.

You need to check with your provider though, some companies do it as 10% of your normal monthly payment rather than 10% of balance at beginning of year, there is a big difference.

Not sure what you have done wrong with the calculator as based on 17 yrs to pay 50250 with a monthly payment of 297. Plus a monthly over payment of £500 (if even allowed without incurring ERC) would take 6 years to clear.

Thanks for your reply.

Not contacted Nationwide directly yet. My mortgage has been changed to fixed rate as of today.

I have taken this from Nationwide website:- http://www.nationwide.co.uk/support/support-articles/manage-your-account/mortgage-overpayments#xtab:repayment-capital-and-interest-fixed

Which states:-
For mortgages reserved after 29 May 2013

You can make overpayments of 10% or less of your original mortgage balance per mortgage anniversary year without incurring an Early Repayment Charge (ERC)

My original mortgage balance was £70800. My annual statement is produced on 31st December. Based on the website I am right in thinking that I can overpay 10% of £70800 by 31st December 2014?

I did make a lum sum payment of 7k last month when it was on variable rate.

Thanks
MS