Nationwide overpayments and redemption

cherub2008

I am hoping that one of the mortgage brokers can help me.

I have 3 years 9months left of a 5year fix which will expire October 2011.This is also the date when the mortgage will be completely paid off.I would like to start making overpayments with a view to paying it off about 18 months early.Although the overpayment amounts will be well within those permitted by Nationwide,I phoned them to check as to whether of not there would be an early redemption penalty applied.The girl at the call centre referred my query to a supervisor and came back saying there would be no penalty as it would be a total redemption.
I feel a little uneasy as Nationwide's t&c are quite clear that a penalty (in my case of 3% of the overpayment) would be applied if the mortgage were to be redeemed within the fixed rate period.

What is your opinion?

JIMBOBC

I asked for written confirmation. I my case there was a a charge but they detailed the calculation and were transparent

cherub2008

JIMBOBC - thank you for replying.I will of course write to Nationwide for their confirmation.I know that most overpayments will still leave a balance at the end of the fixed period and that my situation is different in that overpayments will lead to total redemption.

chappers

Nationwides penalties for redemptions/ overpayments outside of the allowed overpayments are 3% of the amount overpaid. This wouldn't be much in your case. I'm sure the lady was correct because if you overpay within the terms of the mortgage the only payment they could possibly charge you for was the actual payment that redeemed the mortgage, and you could arrange it in such away that it was £1.
But then of course you would lose 3p.

cherub2008

Thank you chappers - very succintly put and logical.It seems obvious now.Roll on 2 years from now - after the rollercoaster of the 90s and 15% rates,when losing my home was a real possibility,it will be such a relief to have it all paid off.

JIMBOBC

I got my statement from nationwide through yesterday and it said clearly on mine that if you have under 10 years left you have no redemption fee? Maybe the same for you.