Nationwide Product Fee on Renewal

annonboy

I am trying to understand the calculator on the Nationwide site for renewals. I think not paying the £999 fee and paying the increased interest rate is better value but the calculator is suggesting otherwise. Why is the balance after 2 years higher if the amount paid over 2 years is lower - surely I am paying off the mortgage off at the same rate?

Screenshot below - forum won't allow me to make it a link as I'm a new user.

i.ibb.co/LCc4CgY/Screenshot-2020-01-11-at-21-10-11.png

blenz101

The calculator is correct, your best option would be to pay the fee (or switch to another provider potentially).

Your interest is calculated daily so that extra 0.4% over two years really does add up. You would want your balance at the end of two years to be as LOW as possible which the fee product is showing you.

You are paying more per month with the zero fee product because the interest rate is higher and therefore to meet your term a higher monthly payment is needed.

annonboy

Thank you - that makes sense. I've updated my spreadsheet to account for interest being added daily.