Nationwide Fixed or Variable?

caithalan

Hi

I currently have a £125k mortgage fixed at 4.79% for 5 years (ending Feb 2011) and have just enquired with the nationwide about borrowing a further £15k to pay for medical expenses thatthe NHS kindly won't cover. They approved the application and asked if I wished fixed rate of 4.98% for 5 years or variable of 4.19%. Any advice as to what I should do? The interest rate would only need to go up by 0.5% before I would be paying more than the fixed rate but then I guess they may reduce their mark up on the base rate? Any advice greatly appreciated.

Radiantsoul

caithalan wrote: »

Hi

I currently have a £125k mortgage fixed at 4.79% for 5 years (ending Feb 2011) and have just enquired with the nationwide about borrowing a further £15k to pay for medical expenses thatthe NHS kindly won't cover. They approved the application and asked if I wished fixed rate of 4.98% for 5 years or variable of 4.19%. Any advice as to what I should do? The interest rate would only need to go up by 0.5% before I would be paying more than the fixed rate but then I guess they may reduce their mark up on the base rate? Any advice greatly appreciated.

Interest rates will probably fall this month or next. But the question is how affordable would you find it if they were to increase? On the other hand assuming it is a standard varaible rate you can make overpayments without penalty, whereas you are limited with fixed rate deals...