Overpayment - What happens when the overpayment reserve exceeds the outstanding balance?

dazzammm2

Hi, 
I have a reasonable overpayment reserve and its getting to the point where the outstanding balance will be less than the overpayment reserve. I am assuming, at that point, there will be no balance to charge interest on so what happens at this point and what are my options? 

MWT

Depends on the terms of your mortgage, the details should be listed there.

Worst case you earn no interest on the excess, but you will pay no interest on the mortgage.

Best case you earn interest on the excess, but it may be less than you could earn elsewhere of course...

Hoenir

What do the terms and conditions of the product state? 

BarelySentientAI

I'm sure you've checked, but I was once shown a friend's statement of account where the overpayment reserve had confused them:

50k balance and 50k overpayment reserve meant that they still owed 100k but were 'ahead' by 50k.

They misunderstood it (based on what had happened with a different friend where it was the case) to mean that they had paid off the mortgage completely.

As long as you're clear which it is for you.

leonj

On my mortgage with nationwide the overpayment reserve is already deducting from the outstanding balance figure it shows you.  Interest is charged on the entire outstanding balance