How is Nationwides interest calculated?

gemima

Hello,

We want to start overpaying on a further advance we have with the Nationwide which is on their SVR. We currently have a very good fixed rate deal at 4.79% which doesn't end until July 2010.

Does anyone know if we are better putting the extra we want to pay in an ISA every month or just paying directly off the mortgage. I don't know if their interest is calculated on a daily basis or annually?

Any advice appreciated.
Thanks

minimike2

Nationwide calculate daily.

hyposmurf

Im also on the same rate from Nationwide and deal ends similar time.I am going to top my ISA up fully if I can each year and then start to make mortgage overpayments after that as my ISA interest rate is higher than 4.79%.

gemima

Hi thanks. That is what we thought we would do but I am not sure how much extra you can overpay in one lump sum? Does anyone know?

Leon_W

You should be able to pay as much as you like off of the further advance at SVR as usually these have no penalties. You'll have to make sure that that is the part that is piad down.

Nationwide normally allow overpayments of £500pm without incurring early repayment charges but this is dependent on how many ways your mortgage is split. If it's in say 3 parts and there are ERC's on all of them then as far as I am aware you can make 3 X £500 overpayments. One on each part of the mortgage.

Have a word with Nationwide to clarify ofcourse.

Regards

bananabrain_2

The answer to this is probably simple enough that I should know, but I don't.
Would someone kindly explain the reasoning of why daily interest is such a big issue and it's relation to when you should make your monthly mortgage payments?