Nationwide inventing risk factors to make me pay 10's of thousands of pounds more on my mortgage

cre8toruk

simon_or said:

You will be in the exact same position whether you take a longer term and overpay or shorten your term.

Are you still getting the 2.69% rate or not? At what stage of the mortgage process are you? That might be the confusion.

As per what my broker told me, all banks have uodated their affordability assumptions multiple times this year due to the high inflation.

again not true, I'll be in the same position term wise as I am now but will have "lost" 5 years worth of payments to achieve precisely nothing. if they agree a mortgage in principle and all affordabilty checks are completed then they're stealing money from people by changing the terms after they agreed it.

simon_or

I still don't get how you are any worse off but I'm not going to argue the point.

With affordability, if Nationwide updated their calculations between the mortgage in principle and the full application, then that's why you now need a longer term to qualify.

A mortgage in principle is not a full application so I don't see how that amounts to changing the goalposts.

The best person to answer your concerns should be your broker. What is he or she saying?

cre8toruk said:

simon_or said:

You will be in the exact same position whether you take a longer term and overpay or shorten your term.

Are you still getting the 2.69% rate or not? At what stage of the mortgage process are you? That might be the confusion.

As per what my broker told me, all banks have uodated their affordability assumptions multiple times this year due to the high inflation.

again not true, I'll be in the same position term wise as I am now but will have "lost" 5 years worth of payments to achieve precisely nothing. if they agree a mortgage in principle and all affordabilty checks are completed then they're stealing money from people by changing the terms after they agreed it.

kingstreet

If you take a mortgage over 17 years and make the level of payments required for a mortgage over 13 years, you will repay the mortgage after 13 years. Assuming rates remain the same throughout.

kingstreet

Here's an example. £100,000 @ 5%pa.

17Y monthly payment = £729
13Y monthly payment = £872

Take a 17 year mortgage and overpay by eg £145pm.

Overpaying would save you £12,497 in interest alone, and mean you pay the debt off in full 4 years & 0 months earlier.

---

Normally you repay £729 per month. If you regularly overpay £145, you'd be mortgage free 4 years and 0 months earlier. Your total payment over this period would be £136,188.

Do your own comparison.

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

ElwoodBlues

I think perhaps cre8toruk is trying to say they'll be worse off because they can no longer get the 2.69% that they had AIP months ago?

kingstreet

ElwoodBlues said:

I think perhaps cre8toruk is trying to say they'll be worse off because they can no longer get the 2.69% that they had AIP months ago?

If that's the case I wish he'd bloody said so...

BikingBud

kingstreet said:

Here's an example. £100,000 @ 5%pa.

17Y monthly payment = £729
13Y monthly payment = £872

Take a 17 year mortgage and overpay by eg £145pm.

Overpaying would save you £12,497 in interest alone, and mean you pay the debt off in full 4 years & 0 months earlier.

---

Normally you repay £729 per month. If you regularly overpay £145, you'd be mortgage free 4 years and 0 months earlier. Your total payment over this period would be £136,188.

Do your own comparison.

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

This!

If the interest  rate is the same then the extended period, extra 4 years, will be the driver for the difference in total amount repayable not the interest rate.

Therefore if you target the overpayments a suggested, notwithstanding any ERC, then you will be able to pull those 4 years back.

There are  many great calculators that would assist in understand the effect or overpayment and ERCs:

There is a good ink here: 

https://forums.moneysavingexpert.com/discussion/1157173/my-excel-mortgage-spreadsheet/p1

Or you could try a comparator such as found here: 

http://excelworks.co.uk/default.aspx?page=30100&alias=Download Excel Mortgage Calculator Spreadsheet

TheAble

kingstreet said:

ElwoodBlues said:

I think perhaps cre8toruk is trying to say they'll be worse off because they can no longer get the 2.69% that they had AIP months ago?

If that's the case I wish he'd bloody said so...

The way I read it he's still getting the 2.69%, albeit a lower amount and a longer term. But what diff if you can make overpayments..?

Neilos9

TheAble said:

kingstreet said:

ElwoodBlues said:

I think perhaps cre8toruk is trying to say they'll be worse off because they can no longer get the 2.69% that they had AIP months ago?

If that's the case I wish he'd bloody said so...

The way I read it he's still getting the 2.69%, albeit a lower amount and a longer term. But what diff if you can make overpayments..?

EXACTLY...

theoretica

cre8toruk said:

if my term was 13 years and the term is now extended by 5 years if I overpay by 400 a month this only gets me a term reduction of just under 5years so in 5 years time I'll be back to the 12 years I'm currently at.. I would have to overpay b £800 a month to get back to where I should be in 5 years time i.e. 8years

Eh? Are you forgetting the term going down through normal time passing?  If the term is extended by 5 years then in 5 years time if you do not overpay you will be back at your current term.  If you do overpay to shorten the term you will be at less!