Question regarding overpayments when switching product deal

renegade1

Hi, say I am on my last year of current fixed rate deal and have maxed out overpayments for the year, am I still able to make a lump sum overpayment when switching products to a new fixed rate deal, to reduce the principal even further before moving to the new rate, without penalty? I am with Nationwide if this helps, thanks.

AndyJR

I'm no expert but I don't see why not. Could you not for example setup the rate switch so that you fall onto the default standard variable rate for just 1 day, before the new product starts the next day. Then on the day in question you can make a big lump sum payment without any sort of penalties, with the lower principle carried forward into your new product and not counting towards any overpayment limits on the new or previous fixed rate product.

There might be a simpler way, maybe just call the mortgage team at nationwide and ask what scenario works.

If you have maxed you what you can overpay keep an eye on fixed term saving rates. They may start creeping up now so you can put the money somewhere useful to build up the lump sum overpayment when you switch rates. Just make sure you can get at the money when it's time to do the overpayment!