Nationwide fix Ending Jan - BMR or Switch?

namxat

To quote !!!!!! here: "when I enquired I was told that I couldn't switch without paying the ERC - as if that was a serious option !"

I have a Nationwide fixed rate deal at 5.85% which ends at the beginning of December this year.

With the base rate cut to 1.5% today I assume the BMR will end up at 3.5%. The early repayment penalty for my mortgage is 2% if I read the literature right.

So, assuming a year of mortgage remaining for simplicity, if I took the gamble that the bank of england base rate wasn't going to rise more than 0.25% this year, I would be better off switching to the BMR, right?

Assuming the bank of england rate remains the same this would equate to being about £500 better off (on my £145,000 mortgage).

A couple of questions:

1) Does the maths of this work (any silly mistakes)?
2) Is there any way that Nationwide could say no to me requesting to go to the BMR?
3) Would I have to undergo a re-valuation (gulp)?
4) What is your opinion on the gamble?????

so could it be worth paying the ERC?

cptncanary

What would the ERC cost you?

namxat

ERC is currently 2% of my £145000 mortgage = £2900

Oh, and a quick back-of-the-envelope calculation shows that as there's only 11 months of my mortgage remaining, the saving reduces to £220ish. That is, assuming the bank of england base rate doesn't change...

cptncanary

I'm in a similiar boat; I took a 2 year fixed from Nationwide in October last year, and my ERC would be around £800. I have my main 5 year fixed mortage with them that ends in February, which I will allow to gone on to their SVR.
As Nationwide are one of those lenders who aren't exactly dropping their rates dramatically, I could move both mortgages somewhere else.

From my perspective, I'm looking to see if I could re-coup the ERC amount, and save even more, by paying it and moving elsewhere.

Sorry this is no help, but at least you're not alone!

luckyfool

Your big problem here is that Nationwide will not let you switch to the BMR before the end of the deal. You could switch to their tracker at 2.49% above base rate with a collar of 1% and pay fees to do so on top of your penalty. You could remortgage to a variable rate with another lender. You could wait to the end of your fixed rate and allow it to expire onto the BMR. What Nationwide will not do is offer the BMR as a product switch option to you now. It is no longer available to new or existing customers as a product, only as the rate your deal might revert onto.

SnowInAugust

Hi,

We had a 2 year fixed rate mortgage with Nationwide that was due to end on 30/04/09. We called Nationwide and were told we couldn't switch to BMR before that date. About a week or so later (mid Feb), we received a letter offering us the opportunity to switch online. I did this and it allowed me to select the BMR and then gave me the option of starting it on 01/03/09 or 01/04/09 or 01/05/09. Both of the first 2 options were before the end of our fixed rate period. I selected 01/03/09 and completed the rest of the process. We have now received e-mail and written confirmation that we are on the BMR from 01/03/09 (2 months early) and are looking forward to our lower mortgage payment going out in a few days!