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NatWest to allow annual overpayments of 20% of mortgage balance

Christina Hoghton
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Christina Hoghton

The lender is doubling its penalty-free overpayment allowance from 10% a year to 20%

High street lender Natwest will increase its mortgage overpayment limit for existing mortgage customers from 10 per cent to 20 per cent of the outstanding balance annually early next month.

The lender said that this would apply to mortgage customers on fixed or tracker deals.

Customers making lump sum overpayments over £1,000 will have their monthly repayments recalculated, whereas for those making overpayments less than that amount, their repayments won’t change.

The latter could mean that they have a lower balance to refinance when it comes to a new fixed term.

The lender will write to customers making regular monthly overpayments which are more than £500 per month or use eight to 10 per cent of their annual overpayment allowance to inform them to the changes.

A Natwest spokesperson said: “We regularly review mortgage policy and propositions to ensure we are meeting the needs of our customers.

“Early next month we’ll be supporting mortgage customers on a fixed or tracker deal by increasing the overpayment limit from 10 per cent to 20 per cent of the outstanding balance.”