Nationwide Over payments. Under or Over £500. How it affects?

Miss.Fortune

Hi,

I have a repayment mortgage with Nationwide which I've been overpaying by £25.00 or £50.00 each week. My goal is to reduce the term, not the monthly payment.

My overpayment "pot" is showing as £1,375.00.

When looking at the online account, there are options for me to choose how overpayments are treated as follows;


How do overpayments work?

If you overpay by less than £500

The balance of your mortgage will reduce and you will be charged interest on the lower balance from the following day. At the next natural mortgage payment change, your monthly payment will be recalculated to include any overpayments you have made.

If you overpay by £500 or more

You can choose how this affects your mortgage:

1. Pay off my mortgage earlier by reducing my mortgage term

2. Reduce my future monthly payments

3. Keep my existing payment and term as-is. (At the next natural mortgage payment change, i.e. interest rate change, my payment will be automatically recalculated).



I have selected option 1 of the above. But nothing seems to be happening with my £1,375 overpayment, it just seems to be sitting there. The term doesn't seem to have reduced (at least I haven't had any communications with Nationwide to say this is the case).

So my question is. Does the "If you overpay by £500 or more" refer to when you pay £500 in one lump some only?

Or can it apply to when I've paid in over £500 in small lots?

Anybody know?
Thanks :wave:

Thrugelmir

Miss.Fortune wrote: »

I have selected option 1 of the above. But nothing seems to be happening with my £1,375 overpayment, it just seems to be sitting there. The term doesn't seem to have reduced (at least I haven't had any communications with Nationwide to say this is the case).

This is covered by

At the next natural mortgage payment change, your monthly payment will be recalculated to include any overpayments you have made.

Until then they will sit as an overpayment balance. The balance will be reducing the amount of interest you are charged on a monthly basis. While at the same time you continue to make your current normal monthly payment. In effect the mortgage would be repaid quicker if this was to remain the case for the duration of your remaining mortgage term.

To change the mortgage term requires a contractual change. This you would have to apply for. As NW may well have internal criteria such as affordability checks to perform being agreeing to such a change.

While you may not be seeing much benefit of making overpayments now. You will in the longer term. Stick with your plan. As from acorns grow oak trees.

Nebulous2

It applies to paying over £500 in one go.

Miss.Fortune

Nebulous2 wrote: »

It applies to paying over £500 in one go.

Perfect, thank you!

Miss.Fortune

Thrugelmir wrote: »

This is covered by



Until then they will sit as an overpayment balance. The balance will be reducing the amount of interest you are charged on a monthly basis. While at the same time you continue to make your current normal monthly payment. In effect the mortgage would be repaid quicker if this was to remain the case for the duration of your remaining mortgage term.

To change the mortgage term requires a contractual change. This you would have to apply for. As NW may well have internal criteria such as affordability checks to perform being agreeing to such a change.

While you may not be seeing much benefit of making overpayments now. You will in the longer term. Stick with your plan. As from acorns grow oak trees.

Thank you for your reply. That makes things clearer now. :beer:

I loved your last sentence. Very wise and made me feel a bit better about my small overpayment total.

Cheers