Nationwide rate cut

Helpget_meout

Just had a letter from Nationwide about rate reduction going from 2.5% to 2..25%
I have been overpaying last couple of years balance is approx £17300 approx 7 years left.
normally pay £275 with overpayments of £150.
New payment from September is £224 with the rate reduction is this correct as didnt expect £50 reduction on 0.25% rate cut does sound correct?

lee111s

Call up and ask, but no it doesn't look right.

I owe ~96k with 23 years 6 months to go and my reduction was about £12pm.

xnoxxnox

Sounds about right. 150 overpayment doesn't actually get counted into the monthly payment calculations, instead it goes into overpayment buffer (one doesn't pay interest on that, but monthly payment is still projected until redeption date without the buffer). On any rate change - be that product switch to lower LTV, or a rate cut, the overpayment buffer is rolled up and the new monthly payment is now correct up until redemption date. 2.25% still sounds a bit high, you do mention that you have been overpaying for a while now, could you check if you have crossed an LTV band and if so, are you eligible to switch from current tracker, to a lower rate tracker? I did so with them in April.

Helpget_meout

ok will ring up
I know a couple of years ago I did ask for the payments to stay at £275 rather be changed at the yearly review the overpayment pot stands at £17K on original £64K mortgage.