Nationwide Overpayments in calendar month of completion

Trying_to_be_good

In case anyone else finds themselves in the odd position I was in...

Having divorced, sold the family home and ported the whole mortgage (which has ERCs) to my new home, I had equity from the house sale. I paid the maximum penalty-free overpayment (10% of the ported balance, not the original mortgage balance) as soon as the equity from the solicitor arrived, and thought that would be it for the year.

On carefully reading the Key Facts Illustration (KFI), I noticed that it said the annual overpayment period would be reset on the first of the month FOLLOWING completion - so I've been able to pay off a second 10% of the ported balance within a few months, penalty-free.

I realise not many will be in the position of having a pile of cash to do this, and savings rates may not stay so low forever, but just in case it helps, get the first overpayment in within the calendar month and the penalty-free overpayment calculation is reset to zero on the first of the next month (I moved in Feb, so made a payment in Feb and could make another in March).
:beer: :j

kingstreet

The wording of the KFI I have in front of me, produced on the Nationwide website says;-

If you make overpayments totalling more than 10.00% of the original loan advance amount* (the Overpayment Allowance), during the early repayment charge period(s) shown in section 10, you will be charged an Early Repayment Charge. This will be based on the percentage(s) shown in section 10 and calculated on the amount paid in excess of the Overpayment Allowance.
The 12 month Overpayment Allowance period will start on the first day of the month following completion. This will continue
to be reset every 12 months until the end of your benefit period as described in section 4.

If you are porting any products to your new mortgage, as described in section 10, the overpayment calculation will be based on the balance(s) being ported to this new mortgage and not the original advance amount on your existing mortgage. Your new 12 month allowance will commence from the first day of the month you complete on your new mortgage.

This suggests that those porting do not have the same terms as those who aren't, who benefit from the "following."

Landofwood

kingstreet wrote: »

The wording of the KFI I have in front of me, produced on the Nationwide website says;-



This suggests that those porting do not have the same terms as those who aren't, who benefit from the "following."

Whooooops!

kingstreet

TBH if I was going to try to use that, I'd phone and clarify exactly what it means before I did.

Just in case, like.

Trying_to_be_good

I have a secure message reply stating that the overpayment period is 1 March 2015 to 29 February 2016, and the overpayments in February 2015 do not count in the March 15 to February 16 period, so I'm confident in my case, even though the wording on my offer is exactly as kingstreet has quoted.

I wouldn't trust just a phone call! And given that Nationwide are pretty vocal on looking after their existing customers, I'd be surprised if they did enforce something for others that's detrimental to existing customers. I guess anyone else considering this should check for themselves.

kingstreet

Absolutely.

Not suggesting it won't work, just a note of caution.

Agree with difficulty in trusting phone calls. You can easily get three different answers to the same question on the same day.

Elfbert

Even though I could work out all my overpayment amounts, I still asked Nationwide to give me the exacts figures and payment periods in writing, as I would with any bank, just in case! For the few minutes it takes to type a message, well worth the peace of mind having it all in writing.

(Well done, OP, for spotting the opportunity to overpay, proper moneysaving!)