Overpaying on Nationwide Mortgage

pollyanna24

I know if you overpay by more than £500, then Nationwide automatically lower your payment each month, but what happens if you only overpay by say £200 each and every month?

When does the monthly amount be reviewed if you are on a base rate rather than a fixed rate (when I assume the monthly amount would be reviewed at the end of the fix)?

dimbo61

I think but please check with Nationwide that the overpayment comes off the outstanding balance and once you have paid more than £500 then the mortgage is recalculated and lower monthly payments.
In your example the trigger would be £600 or every 3 months.

pollyanna24

dimbo61 wrote: »

I think but please check with Nationwide that the overpayment comes off the outstanding balance and once you have paid more than £500 then the mortgage is recalculated and lower monthly payments.
In your example the trigger would be £600 or every 3 months.

Thank you. Very helpful. I wish to make small overpayments to make the monthly payment more manageable rather than paying it off early. Of course, this will be the ultimate intention, but small steps and all that!

nidO

dimbo61 wrote: »

I think but please check with Nationwide that the overpayment comes off the outstanding balance and once you have paid more than £500 then the mortgage is recalculated and lower monthly payments.
In your example the trigger would be £600 or every 3 months.

This is not correct - Overpayments will come off your outstanding balance immediately however simply hitting £500 of total overpayment doesn't trigger a rate recalculation.

When overpaying by less than £500 at any one time, your repayments and term will stay the same until the next natural repayment change (such as switching from a fixed rate to SVR, or a change in the SVR rate), at that time nationwide will recalculate your repayments based on the new interest rate and your balance after your overpayments have been factored in.

So in your case OP, your repayment will stay the same until the SVR next changes (or you do a product switch).
Therefore, if your goal is to reduce your monthly repayment, you should keep your overpayments until you've built up £500 or more, then overpay that all at once (and make sure your overpayment setting with Nationwide is set to reduce your future payments, as you have a choice of how your overpayment is handled when paying off more than £500).