Lump sum overpayment when refixing

Jeeps55

My current mortgage deal is expiring at the end of the year. I have already maxed out my overpayment allowance. I have around 100k that I would like to pay off the mortgage before refixing. My current lender (natwest) has decent rates so will most likely stay with them.
I wondered if anyone can advise on the process of refixing with the same lender when paying a lump sum off at the end of the term? Would it have to go through a conveyancer to do proof of source if funds checks? Or is it a similar process to a usual overpayment? 
The funds are saved in various places and have moved to different accounts numerous times, so proving the source of funds will be a bit of a headache. Just wondering if this would be part of the process or not? If anyone could advise it would be much appreciated!

la531983

No different to any overpayment surely, I paid £15k off mine just before a remortgage and Barclays didnt bat an eyelid.

jifmoose

Can also report something similar with Barclays (Woolwich), 40K before rate switch, entirely unquestioned. All the cash was from earnings/savings, but lead a complicated path out of stock ISAs etc. I doubt they'll be too interested in the funds' source.

One thing to note is that Barclays have a very generous policy of allowing up to 90% capital repayments within the last 30 days of the fix (and a considerable amount up to 90 days before) without any early repayment charges. I verified this with Barclays (by phone and by online chat [i.e. in writing]) beforehand to avoid getting stung - it might be worth checking this with Natwest too?

jifmoose

A small wrinkle to be aware of depending on how you pay is your bank may limit how much can be transferred in a single day. To pay off this amount I did a number of transfers over the course of a few weeks in amounts ranging from 2K-5K (a little tedious, there is probably a better way of doing this).

Again, this is (probably) peculiar to Barclays - but this did have a subtle effect based on the size of payments. Smaller payments (<3x our contractual amount, so the 2K payments) actually go into a different pot from larger ones (5K).

• The larger payments (5K) counted as "part redemptions" and directly reduced the capital and recalculated the contractual amount.
• The smaller payments (2K) counted as "overpayments" and go into an "overpayments balance". This does reduce the interest payable so you immediately get the benefit, but surprisingly was not merged into the main pot upon the rate switch.

The only real effect of this is that our contractual amount has remained higher than we would expect from the actual amount owed on the mortgage (capital balance minus overpayment pot). This has a rather funny effect whereby if we keep paying the contractual amount, we will necessarily pay the mortgage off (8 years or so!) early - even though the term on paper has not changed.

This is not necessarily a bad thing as contractual payments are very low anyway, and having them higher means we can overpay more in future.

Jeeps55

@la531983 was that within your early repayment allowance? I have already overpaid the max allowed, so am wondering if I'd have to go onto the SVR, make the repayment and then re-fix

Jeeps55

@jifmoose thanks thats helpful. I cant see anything in my documentation about additional overpayments being allowed in the final month, but with check with the lender 

SandyShores

Nationwide also allow unlimited overpayments in the last 30 days of a fixed rate.  Did this in our last remortgage.  Our broker told us - but I couldn't find it anywhere on their website, so I used the banking app chat to get confirmation in writing.

la531983

Jeeps55 said:

@la531983 was that within your early repayment allowance? I have already overpaid the max allowed, so am wondering if I'd have to go onto the SVR, make the repayment and then re-fix

I was on the SVR at the time. 

Wouldnt change the crux of the question though, they wont ask where its come from.

Jeeps55

I've heard anti money laundering checks can being triggered if substantial overpayments are made. And I understand these would be undertaken if we were changing lender. So I'm wondering if there is a point at which they'd be triggered with our current lender.