Payments

This page includes information on first payments, overpayments and payment difficulties.

How we'll calculate interest on your clients first payment

Once your clients have completed their application, they’ll receive a First Payment Notice in writing within 7 working days. This is to inform them of their first mortgage payment and when we’ll take payment from their account.

Your clients' first payment can be higher than their normal monthly payment. It’ll include interest from the date we released the funds to the end of that month. Plus their normal monthly payment for the following month.

For example if your client moves in on the 12th of May, their first mortgage payment in June will include interest for 12-31st of May. As well as the standard mortgage payment for June.

Overpayments

10% annual overpayment allowance. Your client can save money by making overpayments of up to 10% a year. As we base your client's overpayment allowance on the original loan amount and not the reducing balance, they can benefit even more. 

Example for new purchase or remortgage

Example for new purchase or remortgage table
Product Reservation Date 29/05/2019
Loan Amount £100,000
Overpayment Allowance 10% of £100,000 = £10,000
Mortgage Completion Date 02/07/2019
Allowance of £10,000 reset at next anniversary date until the end of the benefit period 01/08/2020

In the example above, the original loan amount advanced on 2 July 2019 is £100,000, making the year one overpayment allowance £10,000.

Whatever the balance at the end of year one, the overpayment allowance for year two remains calculated as a percentage of the original balance (£100,000 x 10% = £10,000).

NB: Early Repayment Charges (ERC) will apply if your client overpays by more than 10% a year during the deal period. 

Important information

For products reserved on or after 29 May 2013:

  • If your client overpays by more than their overpayment allowance each year, an ERC will be payable on the amount paid in excess of the overpayment allowance.
  • When a new switch occurs, the overpayment allowance is reset. The new yearly cycle will start from the new switch date.
  • The annual overpayment allowance is only applicable whilst in the deal period of our fixed and tracker rate mortgages.
  • Tracker rate mortgages reserved after 2 May 2014 have no ERCs. So your clients can make unlimited overpayments without incurring a charge.
  • You can find the original loan amount advance in the original Mortgage Illustration/Offer
  • Percentage allowance is a calculation of the original loan amount minus any admin fees.

For products reserved on or before 28 May 2013:

  • These will remain on the £500 per month overpayment allowance
  • Any ERCs incurred will apply to the entire overpayment amount

Our BMR/SMR, which is only available to existing customers reaching the end of their deal period, allows unlimited payments. So your client can overpay by as much as they like, when they like.

An overpayment can impact the LTV when completing an additional borrowing (further advance) application. If you would like to remove the overpayment reserve, you'll need to follow the overpayment reserve removal process. Terms and conditions apply.

Overpayment reserve

If your client(s) make mortgage payments exceeding the contracted monthly amounts, these overpayments will form an 'Overpayment Reserve'. When keying a rate switch, the current mortgage balance will appear on the screen. Your client can then choose to (with prior permission from Nationwide) utilise this 'Overpayment Reserve' to lower future monthly mortgage payments.

If your client has an overpayment reserve, their overall mortgage balance when calculating their Loan to value (LTV) may include an overpayment reserve. (This won't apply in rate switch applications).

We'll include the overpayment reserve for additional borrowing (further advance) applications when calculating their LTV. If you would like to remove the overpayment reserve, please follow the overpayment reserve removal process.

Borrow back

If your client(s) took out their mortgage product deal with Nationwide on or before 29 April 2009, they'll move/have moved to our BMR at the end of their deal. Your client will have access to borrow back and payment holiday facilities. The BMR is guaranteed to be no more than 2% above the Bank of England base rate. If your client chooses to switch to a new mortgage product, they'll no longer have access to the BMR or its facilities and will revert to our SMR which has no upper limit or cap.

If your client(s) took out their mortgage product deal with Nationwide on or before 3 March 2010, they'll move/have moved to our SMR at the end of their deal. Your client will have access to borrow back and payment holiday facilities. If your client chooses to switch to a new mortgage product, they'll no longer have access to these facilities.

If your client(s) took their mortgage out with Nationwide on or after 4 March 2010, they'll move/have moved to our SMR at the end of their deal. Your client will not have access to borrow back and payment holiday facilities.

Acceptable proof of payment history

Applicants must not have exceeded 3 months' arrears in the last 3 years.

Evidence of Mortgage payment history using:

  • The last annual mortgage statement (covering 12 months' payments)
  • Where a mortgage statement covers less than 6 months payments and is over 6 months old, we require the last 3 months bank statements
  • If you don't have the above, we'll require an existing lender's reference

Tenancy payment history

We do not require you to verify past payment history for any applicant who is currently renting. Or for an applicant that has been renting over the last twelve months.

Repayment Methods

Borrowing type Available to Repayment method
Capital and interest

All members

Capital and interest (repayment) mortgages. Available for all borrower types.

Interest only/part and part		 New purchase or remortgage members Read more about interest only and part and part repayments on our interest only page.
Existing interest only members moving home Read more on our existing Nationwide borrowers page.

Payment holidays

Your client may be able to take a payment holiday if they took their mortgage out prior to 4 March 2010. They may apply to take a payment holiday (between 1 and 12 months), and they must have a mortgage that is less than 80% of the value of their home at the end of the payment holiday.

More information for your client, including how to apply, is available on our customer website.

Payment difficulties

If your client is experiencing difficulties in meeting their mortgage repayments then a payment holiday may not be appropriate.

Please ask them to contact us to discuss the options available to them by visiting our customer website or by calling us on 0800 464 30 40. Terms and conditions apply.