Nationwide overpayment reserve.

Essexsi

phillw wrote: »

No it's not. It's money you repaid to nationwide faster than you had originally agreed. They have the right to refuse to lend it back to you if they believe you will not be in a position to repay it again. It sits somewhere between a normal mortgage and an offset mortgage, AFAIK nationwide no longer offer it on new mortgages.

I was in a similar position and decided that for various reasons it was better to just clear the mortgage. The mortgage had been competitive but it was easily beatable at the end, so even if I were to ask for it back then it wouldn't be worth it.

Thanks. Well this has opened up a can of worms for me. Just doing reading on here and NW don't allow borrow back facility on mortgages taken out after 2010. So I'm ok there but they do make you jump through hoops to get it now.

I understand the need for affordability but I would like to have had a letter informing me. I've just been ticking along thinking i was doing well overpaying. My paperwork says "you can borrow back any amount available in your reserve for anything you may want to use it for" .

Knew I should have bought Bitcoin with it!

Thanks for all the advice, I have some research to do. Cheers Si

phillw

Essexsi wrote: »

I understand the need for affordability but I would like to have had a letter informing me.

I'm pretty sure I got a leaflet explaining the changes.

Essexsi wrote: »

Knew I should have bought Bitcoin with it!

Mortgage and Bitcoin are in two completely unrelated risk classes, if this change pushes you from one to the other then it's probably for the best. At least you can't lose the house now.

Essexsi

I was joking about crypto!

I definitely did not get any paperwork. I keep everything, which is good but you can imagine also quite bad!

This has got me thinking about my plans so than you everyone for that. Si

greenbee

Essexsi wrote: »

Sorry green bee, just re-read your post. I don't want to pay mortgage each month from O P reserve, I want to maintain that so I have access to it if required. I will make mortgage payment as normal. Cheers Si

That's not what I meant. The reserve stays as it is - check whether your current preference is set to reduce the term or the monthly repayment, or nothing until the next interest change. If you change the preference to 'reduce the monthly repayment' then every OP you make from now on will reduce the amount you pay the next month, and you'll end up paying peanuts towards the end of the term.

It sounds as if it might be an idea to go in and to talk to someone on the NW mortgage team to go through this in detail and get the relevant illustrations.

Essexsi

greenbee wrote: »

That's not what I meant. The reserve stays as it is - check whether your current preference is set to reduce the term or the monthly repayment, or nothing until the next interest change. If you change the preference to 'reduce the monthly repayment' then every OP you make from now on will reduce the amount you pay the next month, and you'll end up paying peanuts towards the end of the term.

It sounds as if it might be an idea to go in and to talk to someone on the NW mortgage team to go through this in detail and get the relevant illustrations.

Thanks for the clarification. I set it as no change until next interest rate change when I began OPs about 12 years ago. Again to maintain flexibility.

I may go on the site and change to reduce monthly repayment, just to see what happens. Of course you are correct i need to confirm all this with NW.

Ideally I will have it set up to pay off 5k over the rest of the term and then funnel the difference into another savings account.

Cheers Si

TrickyDicky101

Essexsi wrote: »

Thanks for the clarification. I set it as no change until next interest rate change when I began OPs about 12 years ago. Again to maintain flexibility.

I may go on the site and change to reduce monthly repayment, just to see what happens. Of course you are correct i need to confirm all this with NW.

Ideally I will have it set up to pay off 5k over the rest of the term and then funnel the difference into another savings account.

Cheers Si

That's what it will do if you overpay by £500 to trigger the recalc and have set the option to reduce your monthly payments.

I do exactly as you are doing - I have a large-ish overpayment reserve and about £50 o/s on the mortgage. I had no problems at all borrowing back £65k back in 2016 - it was literally a single phone call and a couple of days later the money was in my account.

Essexsi

Essexsi wrote: »

Fortunately I have never had to access the reserve. According to my original paperwork in 2002, the money would be deposited in my bank account within 7 working days. I had just assumed (I know!) that accessing it would pose no problems. It's my money!!!!!

Thanks. Si

TrickyDicky101 wrote: »

That's what it will do if you overpay by £500 to trigger the recalc and have set the option to reduce your monthly payments.

I do exactly as you are doing - I have a large-ish overpayment reserve and about £50 o/s on the mortgage. I had no problems at all borrowing back £65k back in 2016 - it was literally a single phone call and a couple of days later the money was in my account.

Thanks tricky. Your name pops up a lot on other NW threads.

So to get this right.
Next month's regular payment is taken by NW
I then OP by £500 to trigger the recalc.
The next month NW take the new lower amount required to pay off 5k over 12 years.
I DO NOT over pay mortgage ever again but funnel it elsewhere
Keep paying the lower amount

That right? Cheers Si

TrickyDicky101

Yes that's right - you need to overpay by at least £500 to trigger a recalc of the monthly and it might be a good idea to call NW in advance just to confirm that's what will happen.

Essexsi

TrickyDicky101 wrote: »

Yes that's right - you need to overpay by at least £500 to trigger a recalc of the monthly and it might be a good idea to call NW in advance just to confirm that's what will happen.

Thanks very much. And thank you all posters for the info and advice.

Cheers Si

Essexsi

Hi,

By way of an update for anyone interested. I contacted NW and they could not have been more helpful. They went through all the options and confirmed I could have a drawdown up to the amount in my OP reserve. This would be paid into my current account within 5 working days. My mortgage payment was recalculated the day after I made the £500 OP. Very good service from NW and would recommend them to anyone.
Again thanks for all the posters help on this thread. It has certainly made me look over my personal finances and planning.

Cheers Si