Advice on 3 or 5 yr 5.98% fixed rate

JimmyTheWig

What arrangement fees are payable on the two products?
What are the redemption penalties?

iwantitnow

Nationwide launched lower rates last week as they managed to buy in funds a bit cheaper.

However when these funds have been used up then they may have to revert to higher rates.

They also dropped the £599 reservation fee for existing customers last week making it even more attractive.

To me 5.98% is a reasonable rate in the current climate, and I am going for the 5 year fixed

PeteHi

Personally I would fix for 5 years and save all the messing about in 3 years time and the risk of paying fees to remortgage again elsewhere. Your rate with no fees is probably the best deal on the market at the moment (better than what Ive got anyway!)

Systalink

Yes that's right - there aren't any fees for the 3 or 5 year fixed deals. There's a 2 % early dedemption fee on the 3 yrs and a 3% edf on the 5 year. I think I'm going to go for the 5 years, just for peace of mind too

JimmyTheWig

Systalink wrote: »

Yes that's right - there aren't any fees for the 3 or 5 year fixed deals. There's a 2 % early dedemption fee on the 3 yrs and a 3% edf on the 5 year. I think I'm going to go for the 5 years, just for peace of mind too

I think I'd go for the 5 year, too.
It's what we did 2 and a half years ago, and we're well chuffed with what we got!

What we did, once we decided to go 5 years fixed, was reduce the term of the mortgage. We were going to go for 25 years, but realised that we could afford the repayments for a 20 year mortgage so went for that. If we hadn't done the fix we couldn't have done that as we would have needed leeway if rates went up.

If you can do that (or even get the term down to less than 20 years) then you can pay a sizable chunk off in the next 5 years (which you know you can afford). Then, when it is time to remortgage again, you will have a significantly smaller balance and a higher rate won't hurt as much.
My point is that you can pay significantly more off in 5 years than you can in 3. It might not seem like it, but believe me you can.


[Incidentally, it's "redemption" no "dedemption".]

Systalink

yeh, typo on 'redemption.' Thanks anyway. Have reserved the 5 yr product and don't have to sign until the end of Sept, so if there are any further drops in fixed rates i'll be able to swap to a better deal. Nice to have reserved it though. I feel much better having done that.

Locoblade

Are there absolutely no tie-ins / money handed over before the end of September?

sdooley

5 year sounds a good choice.

Systalink

Totally no tie ins at all.

Locoblade

I may have to enquire myself then as we're with Nationwide and due to remortgage at the end of October, so although I'd like to hold out for the potential fixed rate drops with other lenders in the next few weeks, it would be nice to have a "banker" in the back pocket if nothing else