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Nationwide increases annual over-payment allowance

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Nationwide is increasing the amount borrowers can overpay on their mortgage to 10 per cent of their original balance each year.

Customers were previously able to overpay a maximum of £500 a month, regardless of the size of their loan.

This means a borrower with a £100,000 mortgage will be able to pay off up to £10,000 a year without incurring penalties.

Nationwide says mortgages reserved from 29 May will carry the overpayment feature, however existing products are unaffected.

Nationwide head of group mortgages Tracie Pearce says: “The move to a 10 per cent a year overpayment allowance means borrowers may be able to repay their mortgage more quickly than they had previously anticipated.

“Our competitive mortgage rates mean customers are enjoying some of the lowest ever monthly mortgage payments, giving many of them the opportunity to use any extra cash to overpay on their home loan – and ultimately become mortgage-free earlier than they thought.” 

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