Nationwide mortgage - not applying preferences to overpayments

jimjames

Not sure if anyone else has come across this with Nationwide. I have a number of mortgages with them that are all being overpaid by up to the 10% allowed each year. The problem is that Nationwide don't seem to be applying the preferences to reduce term that are set on the accounts. Each time I overpay I need to contact them to get them to manually apply. When you overpay there are 3 options - reduce term, reduce monthly payment or wait until next calculation.

In online banking all the mortgages are set to reduce term for payments over £500 but last time I spoke on the phone these settings were not replicated on their system which they then updated. Since then another overpayment has been made and again the term has not reduced. Another call has been logged with them. It doesn't overly matter as the payment is being applied to the account but it would be nice to see the impact on the mortgage end date when the payment is made.

Has anyone else experienced this with Nationwide? Any tips to resolve it?

greenbee

I’ve found that the app/website functionality is fairly limited. Only the contractual end date is shown online, but the monthly payment remains the same, and the letters that they send confirm the actual remaining term. 

benten69

Also with nationwide here. Every time I overpay more than £500 they send out a letter to confirm the term has been re-calculated and show the new remaining term. I updated my preference on their website and it seems to have gone through ok on their system. Not sure why you are experiencing issues.

Only thing I can suggest is if it's still not resolved after logging it with them on the phone again, raise a formal complaint to get it escalated and hopefully the right person with the right knowledge will update their system accordingly. Other than calling them and official complaints via the banks internal complaints system, then eventually the ombudsman (maybe a bit excessive here, but still and option), not much more you can do.

jimjames

I've had an update from Nationwide which might be of use to others.

Apparently if your overpayment is made before your scheduled monthly repayment it doesn't automatically recalculate regardless of  the settings. It's now been done manually instead, that's another 2 months off the mortgage! Happy days!

Shelly987

Hi, I have a bit of a question and this thread is as close as I can find. I'm looking to overpay on my Nationwide mortgage for the first time. At the end of my fixed term, I am going to be very close to the next LTV band so I am trying to ensure that I am fall into the new band. I'm therefore looking to put in a lump sum of a few thousand. I haven't done this before (it's a new mortgage) and I have to select 'overpayment preference' and I'm not sure on the option I require.

The options are;
1. Reduce Term
2. Reduce Monthly Payments
3. Keep Term and Monthly Payments the same

I think I can eliminate option 2, however, do I want 1 or 3? Can anyone give me a quick summary on what each option means and what the impact/ benefit is? Thanks!

jimjames

If you're wanting to make sure that your LTV is in the lower band then paying as much as possible would seem to make sense.

As such I'd ignore option 2 and either choose 1 or 3. If you choose option 2 then the overpayment will be used to cover future mortgage payments and reduce them so the overall benefit of the overpayment will cancel out.

Reducing the term will mean that the payments are taken into account and more difficult to get back out. Keeping the term and monthly payment the same will mean the overpayment is still sitting on the account if you ever need to take a payment holiday so in your situation I'd probably opt for option 3. The term will be reduced anyway by the overpayment. it just won't be formally shown on your statement as a different end date.