Mortgage overpayments 16 November 2022 at 4:56PM edited 16 November 2022 at 5:03PM in Mortgages & endowments 1 reply 134 views

Matthew1268

I know Martin has covered mortgages and overpayments recently, after looking into my own I wanted to raise this issue and ask what his advice would be. Also does he think this is fair of Nationwide ?

I have been in a fixed deal for the last 4 years, it ends next September 

I started making overpayments about 2 years ago regularly overpaying £225 a month

As my monthly overpayments are under £500, Nationwide put these payments into a ‘Reserve’

There is now £7845 in this reserve - it will be held there and only applied at the end of the product - 5 year deal. 

My issue is - this is a large sum however I am not receiving or gaining any interest on this amount. 

Is this a standard in the industry ?
Is nationwide benefiting from interest on this amount?

K_S

@matthew1268 You are already benefiting from the overpayments that you have made. With Nationwide all overpayments will reduce the interest you pay from the following day, even if it's earmarked as an 'overpayment reserve'. 

For overpayments of less than £500, Nationwide will keep your minimum monthly payment and term unchanged and adjust your minimum monthly payments only at the next change in interest-rate, which is usually when the current fix ends.

Matthew1268 said:

I know Martin has covered mortgages and overpayments recently, after looking into my own I wanted to raise this issue and ask what his advice would be. Also does he think this is fair of Nationwide ?

I have been in a fixed deal for the last 4 years, it ends next September 

I started making overpayments about 2 years ago regularly overpaying £225 a month

As my monthly overpayments are under £500, Nationwide put these payments into a ‘Reserve’

There is now £7845 in this reserve - it will be held there and only applied at the end of the product - 5 year deal. 

My issue is - this is a large sum however I am not receiving or gaining any interest on this amount. 

Is this a standard in the industry ?
Is nationwide benefiting from interest on this amount?