Nationwide overpayment reserve query

MadAboutMoney

Hi all,

Many years ago I had my home on a Nationwide mortgage deal that ended and the mortgage reverted to the BMR rate.
This was pre 2009 and so whenever I moved house I made sure that I retained this so that I would always have the overpay/drawdown benefits of it.

Now, once upon a time, one of said benefits was that you could leave your balance at £1 and they would make your account a 'nominal balance' account, meaning that they would stop taking payments, stop charging interest and stop sending letters, statements etc.

I have moved house again and my new mortgage is on the same 'deal' but they have said that they don't do 'nominal balances' anymore, and that if an overpayment takes the balance to too low an amount, they will just write off the mortgage and close the account!

I asked how low this figure was only to be told that nobody knows...only the computer.

Has anybody else heard of this or know any more detail?

I want to overpay my mortgage to reduce my payments until I need the money to renovate the house. I can't do this if I don't know the magic figure that would close my account and lose me this deal.

jimjames

My Nationwide mortgage is around £400 and not closed, monthly payments £4

MadAboutMoney

jimjames wrote: »

My Nationwide mortgage is around £400 and not closed, monthly payments £4

Thanks...is that on the pre-2009 BMR?
What term is left?

TrickyDicky101

Mine is pre-2009 BMR with an o/s balance of £75 and monthly payments of c.£3. Currently the term runs until 2036.

EDIT: I am definitely going to dip into the reserve next year - your post is faintly alarming as I am counting on having the borrowback facility available.

TrickyDicky101

MadAboutMoney wrote: »

I asked how low this figure was only to be told that nobody knows...only the computer.

Have to say - that's a classy response by the staff isn't it? I wonder if they felt even momentary shame in having to admit that?!

MadAboutMoney

TrickyDicky101 wrote: »

Have to say - that's a classy response by the staff isn't it? I wonder if they felt even momentary shame in having to admit that?!

I was shocked...she said not even management know...the computer will just recalculate after the overpayment and if it deems it to not be financially viable it will close the account and write-off the balance.

Crazy isn't it?!?

TrickyDicky101

Absolute nuts - did they say what happens about the account closure charge (which is £65 I believe for NW mortgages)? Is this still chargeable on the (former) borrower? I expect it is to remove the charge against the property.

MadAboutMoney

TrickyDicky101 wrote: »

Mine is pre-2009 BMR with an o/s balance of £75 and monthly payments of c.£3. Currently the term runs until 2036.

EDIT: I am definitely going to dip into the reserve next year - your post is faintly alarming as I am counting on having the borrowback facility available.

I don't think there will be an issue getting your money back...in my mind it is an overpayment so it is still yours...not theirs, so you aren't borrowing it as such.

At least I HOPE that is what you find.

I used to overpay and drawdown often and never had an issue...but this was years ago.

My situation is just that I have enough money to refurbish my house but I don't want it sat in my current account over the next couple of years, I want to over pay it against my mortgage and draw it down as needed...but the total is enough to pay off the mortgage...so I wanted to pay mortgage-£1 but that will close the account and I'll lose my drawdown facility.

Sooo annoying that they won't tell me to leave £xxx and all will be fine.

MadAboutMoney

TrickyDicky101 wrote: »

Absolute nuts - did they say what happens about the account closure charge (which is £65 I believe for NW mortgages)? Is this still chargeable on the (former) borrower? I expect it is to remove the charge against the property.

They didn't go into any more detail. I just got the impression that they will just close the account, and stop taking payments and writ-off any money owed...because it isn't worth their while keeping it open.

Sheep

Im sure you know the answer to this but have you checked your overpayment reserve is still there? If you moved house the reserve starts again

MadAboutMoney

Sheep wrote: »

Im sure you know the answer to this but have you checked your overpayment reserve is still there? If you moved house the reserve starts again

I don't have a reserve. I want to make an overpayment to take my mortgage to as low as possible without it being closed but I can't find any information as to what that figure is/can be.