Another should I adandon Ny 5 yr fix with Nwide

Fairwinds

Hi there, We took out a 5 year fix at 5.89% in August, to cover the last 5 years of our mortgage - value about £50k (about 25-30% LTV).

I can now get a deal with First Direct - Offset tracker Base Rate + 1.89% = 2.89%
but would have an arrangement fee of £799 + penalties to the nationwide of around £1450.
I currently pay approx £240 a month and would expect this to drop to £117 ( less any offset).

I believe this would mean that if interest rates remained unchanged it would take 19 months to cover my costs of the penalties.

Any thoughts on whether I should go for this or just sit tight - the penalties don't reduce over time, so if I am going to do it I would be better doing it now.

Why did I take out that fixed rate

Robert_Sterling_3

Are you already overpaying by £500 per month ( no penalty for doing this. )

Fairwinds

I have just started to do that - how do I ensure that they the overpayments remain a month apart, by the time they are credited - the payments will come from another Nwide account

mstopham

GordonD wrote: »

I have just started to do that - how do I ensure that they the overpayments remain a month apart, by the time they are credited - the payments will come from another Nwide account

Do you have online banking where you can make payments upto a year in advance? I can do this on my HSBC account. This could be one way setup 12 payments there.
(In the case of my IF account it is 60 days ahead so you could do that on a rolling basis)
I don't know if you can ring them up and ask they take a fixed amount each month, I think credit cards ask if you want to pay minimum, fixed or full balance when you setup a direct debit, would be similar to this.

Enigmatic_Me

I have the same dilemma as you although our 10 year fixed with Nationwide (taken in Oct 2007) is 6.13%, amount owing is around £69,000 which is around 40% LTV, current MP £742.

I have taken the bull by the horns and am in the process of remortgaing to First Direct for the 1.89% offset tracker. We will have a penalty of around £1,800 plus the £799 fee, however I am knocking 6 months of my term which will save £4,452.

I also intend to use the offset the best I can and have salaries paid into the current account and move some savings to the savings account.

I have to say First Direct customer service is excellent!

Trying_to_be_good

When I had a Nationwide mortgage I paid the £500 per month overpayment from a Flexaccount by standing order on teh first of each month and never had the problem of two being credited in the same month.