Lum sum payments to Mortgage

starM

Hi, I have a Nationwide Mortgage. I am currently making overpayments of £500 in which ERP is not payable. If I pay my mortgage early a 2% ERP will be applied.


I am right in saying if I make a lum sum payment say 10k I will be charged 2% which will be £200? Thanks


MS

Mrs_Rachel_Trelfa

It will be 2% of the remaining balance of your mortgage. You need to read the terms and conditions of overpaying as 'normally' you get a 10% of the remaining balance of the mortgage at the start of the year that you can pay in that year without ERC. So if your mortgage balance was over£100,000 and say you hadn't made any overpayments yet this year, then you can pay the £10k with no ERC.

Luckyinlife

I get charged 3% currently 2% next year

You will have to check your policy and it will say youll get charged a maximum of x amount which will tell you

but ya on mine its 2% of the amount im paying of IE £1000 £20 or 10k £200

starM

Hi,

I changed my deal online and downloaded my mortgage, my laptop crashed and all data was lost. So do not hold copy of Mortgage offer.

I did sent an email to Nationwide asking for redemption figure. They said ERP will be calculated as at 2%. Around 42k left on mortgage.

I tried ringing Nationwide but mortgage centre is closed. I don't mind paying 2% of the overpayment I pay but do not want them to charge 2% of the remaining balance. That can get confusing if I decide to clear the balance off in afew months.

Luckyinlife

When you ring up to pay a OP just ask them is the best way to do it i cant see them charging you 2% of the balance if your only paying of 10k

starM

Thanks. I will call them up and ask. While checking through Nationwide website -

It says:-

If you have a fixed or tracker mortgage and it was reserved on or after 29 May 2013 you’re allowed to make overpayments of up to 10% per annum of your original loan amount, not the reducing balance.

I fixed my mortgage in May 2014 - original balance was 72k taken out 5 years ago. So does that mean 10% of 72k? It does say "not the reducing balance".

Any overpayments exceeding the 10% allowance will be charged an ERC on the amount above the allowance, not the total overpayment. The year begins on the anniversary your mortgage started. (If you have a Tracker product that was reserved on or after 2 May 2014, you will not be charged an ERC.)


So my understanding is 10% of 72k is £7200 and if I overpay by 10k then ERC will be on £2800 at 2%?

MS

Luckyinlife

I think your right yes but you will have to ring

its frustrating but need to ring to know for 100%

Like mine is a right pain i get charged 3% so i have to ring them up confirm it then they ask are you sure your happy to pay the charge im like yes charge me lol then they take the payment then i have to prove that the funds are there via bank statement boooo to that haha

taking 10k off in one go what every is great work well done :] you must be happy with that you been saving for a while or ?

starM

Thanks - Yes been Saving for a while.

Why do you have to prove that funds are there via your bank statement?

Luckyinlife

starM wrote: »

Thanks - Yes been Saving for a while.

Why do you have to prove that funds are there via your bank statement?

Good question i give them my card details and it goes thro on the phone so they can clearly see i have the funds or not.
All i can guess is they want to see that its been earned and nor money laundering or something like that
Either way its a pain haha

well done on saving up so much top work