Should I stick with existing provider. 2 years after being a FTB

freestyle_3

2 years ago I brought my first place.

2 years on, I now realise that if I wish to leave Nationwide to move I will have to pay on 2 counts.

Firstly from reading other posts it would seem that I can expect to pay an administration fee (I am yet to look at the T&Cs).

I can then expect to pay something like £400 for moving proivders. Although even if I stay with Nationwide they still will charge a similar amount for me to join up to their special introductory offer.


In the last 2 years, on a 155K mortgage I've not really made any impact on the capital. I've paid off something like 3K over the last 2 years.

Now if I move providers and end up paying £800 odd I feel like it's never going to end.

Am I missing something ?

Poppy9

If you are out of redemption penalties tie ins then look to move. I move my mortgage every couple of years when the discount is up. None of my lenders have made it worth my while staying with them. If you have an IFA ask them for details of remortgage deals else do it your self.

When it comes to fees some provide no fees transfers others a few hundred. Compare the cost of the repayments over the 2 years including fees (if applicable) to find the best deal to move to. I have a small mortgage and am saving £60 per month. This makes it worth my while paying Abbey Nat. £250 admin fee to Principality. I also don't have to pay any legal fees etc.

knuckledragger

freestyle,
your question is on the face of it quite straightforward.
Yes, there will be a fee to leave the Nationwide (I believe there is with all lenders)
If the deal you decide to move to is "fee free" then there may be reduced/no costs from the new provider.
I am surprised that the Nationwide wish to charge you another fee for taking one of their products. The Cheshire BS, for example, don't charge existing customers who move to one of their loyalty follow on mortgages.

The size of your mortgage works in your favour when deciding whether to switch lenders. If you will save more over the term of your remortgage with another lender than the £800ish cost of moving, then it is worth it. For example, if you took a 2 year deal with another lender then you would need to save over £400 per year as opposed to staying with the Nationwide. This should be easily obtained with a £155K amount.

Have a look at the below link to start your hunting on Moneysupermarket.

http://www.moneysupermarket.com/mortgages/mortgage.asp

knuckledragger

Poppy9,
I had a good remortgage with The Principality a few years back. They even wanted to hook me up on a follow on deal via a deed of variance (no fees to pay). But they wouldn't give me a deal on their site as I was an existing customer so I was forced to vote with my feet
I'll be looking to move from my current lender when my deal finishes in August. I'll start looking about June...

YorkshireBoy

You can compare the "true cost over 'n' years" by punching your details into one of the calculators such as https://www.moneyfacts.co.uk

I would imagine with a c.£155K mortgage, you will almost certainly be able to find a cheaper product, over 'n' years, elsewhere - even after you factor all the fees in.

freestyle_3

Thanks.

I take on the point that knuckle made about depending on how much I would save over the 2 years.

But lets say I save £60/month. All the extra fees will get added to my mortgage (I don't have that kind of money to give them for the transfer) so I guess I've got interest to calculate as well

Joe_Bloggs

@Freestyle
The five year deals at Nationwide have lower fees (£199) if you are planning to stick around then consider them. Your capital repayment seems poor. By my mortgage calculator you should have paid off approximately £7K of the capital for a 25 year mortgage @ 4.74%. Do you have online access to your mortgage ? I estimate one month at Nationwides 'BMR' rate of 5.89% will cost you £128 extra a month. You have the oppertunity to pay £500 per month in overpayments. I can only afford £75 at the start of the month and up to £100
on pay day. If I keep this up I will pay the mortgage off six years early.
Good luck in your remortgaging strategy. The one thing you can't afford to do is nothing.
J_B.

KTF

If you want a copy of me spreadsheet them let me know. Its always worth shopping around when your existing deal comes to an end.

Ian_W

Hi freestyle,
From your 1st post you already seem to have made the decision to leave NW, your call but you should consider your current lender, as well as others, when coming towards the end of your intro deal. I have no connection with NW and have never even had a mortgage from them but as an interested observer over the last 12 months or so, there are some things you should consider before making your decision to move.

1. Almost all lenders charge a release fee, NW's is towards the lower end at £95 or so. Other major players, lead by A&L [see the thread about their release fee] have increased these dramatically over the past few years so the industry average is around £2/300. Another provider will charge you this if you leave them in the future, so factor in the cost.
2. NW ads, "Brand New Costomers Onlee!" are aimed primarily at Abbey & Halifax who at the end of an intro deal will not offer you the same deal as new customers can get, only a less beneficial retention rate. So, though NW charge a fee, at least you have access to their best rates. They are not alone, so if you move, it's worth checking out what the situation will be with your new lender when your intro deal ends. Personally I would avoid those who won't offer the same deals as new customers get as increasing fees mean it is getting more expensive to move.
3. NW's products have, for at least the last 12 months, been amongst the most attractive fixed and tracker rates. The mortgagegenie site - HERE - compares the true interest rate over the intro period by including all fees in the comparison. NW's 2&5yr fixed and 2&3yr trackers are shown as No1 when the fees are included over the intro period on a £155K remortgage, other lenders may have lower monthly payments but are more expensive overall. MG don't cover all lenders, for example Yorkshire & Britannia BSs don't figure in comparison or broker lists, but often have good products and are also well worth checking out.

As I said, your call. Moving can save you money but that isn't always the case so, IMO, you should objectively check out your own lender against the opposition before deciding either way.

HTH & BoL.

freestyle_3

Onece again you all have been very helpful.

After speaking to my brooker, he advised to continue with Nationwide. They are the best for many reasons in my situation. But not if I plan to rent (which I don't)

After talking it through, I am now considering an ISA mortgage. Yes it's more risk, but at least there's a chance I may be able to pay it off early.

I am going to see him to get his talked through.

Anyone know of any info on this or recent posts that you've seen covering this type of mortgage please share