Nationwide Basic Mortgage Rate

mysmeg

Hi folks, my fixed rate mortgage of 4.97% ends in January with Nationwide.

I got a letter last month advising my new payment would in crease by £86 based on the BMR being 6.19% - is BMR the same as variable rate? Incidentally I have had 3 requests from them in as many weeks telling me to take up a new fixed rate now etc.

Anyway, their website now says they are passing on the 1.5% cut in rate to their customers in December and the BMR will fall to 4.69% which to me sounds great. Will my payment now be lower then than what I am actually paying now??

I don't know how to calculate the new payment, but now Im thinking I should just " do nothing" and save myself finding the money to pay for a new mortgage arrangement fee??

Does anyone else think this could be the best thing to do for me?

Thank you all
M

Bargain_Rzl

Short answer IMHO is yes.

You are in an almost identical situation to me - Nationwide fixed rate finishes at the end of this month, and I've just had that letter as well. Yes, from next month it'll now be going down to 4.69%, which is slightly lower than I'm paying at the moment (4.89%).

Though you may like to look at fixed rates to give you peace of mind for the future, there's probably no hurry to do so, and you won't get one as cheap as 4.69%.

Do bear in mind that it also won't get much lower than that - Nationwide's base rate is currently tracking BoE + 1.69%, and if the BoE interest rate drops below 2.75% it will track that figure, so the minimum you'd be looking at is 4.44% even if BoE rates were to fall to zero (unless Nationwide were to decrease the tracking margin). However Nationwide could also put their base rate up to BoE + 2% (which would currently be 5%) at any time, because the +1.69 margin is at their discretion - their only guarantee is that it won't ever be higher than BoE + 2%.

mysmeg

Thank your for your reply. I feel very fortunate ( for once) and am just glad that at this precise moment in time I can afford to sit back for a bit and relax.
To be honest I can't see the BOE dropping their rates any further now, so I will have to watch what Nationwide do in the coming months with regards to their base rate.

Guess we are both lucky ( for now)

M

JayZed

I agree, though I think this is only a short-term solution for a few months - if the BoE rate drops again, which is likely, then you should look around for some decent fixed rates. Leave it too long and the rates will start going up again.

mysmeg

Thanks Jayzed, i have till february on my current fixed rate, but I guess a long can happen these days in a couple of months!

M