Natwest - Stay on variable to take Fixed Rate Now as Low?

sva14

My friends Fixed rate with Natwest finished in Oct 2008, she want to go to another fix rate as perfers the safety of fixed outgoings.

In Oct /Natwest offered here a fixed rate of 6.24%, but BOE rates were falling so I told her to hold fire and stay on the standard rate for a while.

It was a good move as her standard variable has gone from 7.19% to 4.19% so far, her payments from £528 to £381pm.

She still wants to get a new fixed rate and at present natwest will offer her a 5yr fixed at 4.89% (This is the only product she is offered as got high LTV). which equals a payment of £421pm.

The dilemma is should she now take out this 4.89%/ £421pm fixed rate as it is the lowest it will get. Or ride out for a while on the 4.19%/ £381pm standard rate and then sign up for the fixed rate in say 6 months?

Is this worry correct - when BOE rates start to climb , then the Natwst Fixed will be higher and we would have missed out?

Any advice appreciated

Rossa_3

I would tell her to sit tight until today's base rate reduction filters through. She may find that NatWest brings out another lower fixed rate in a the next few weeks as they have to keep competitive in the market.

As the BofE has also gone for quantitive easing, pumping another 70 billion into the economy, I doubt that the base rate will come down to zero as that will have big political implications from the thousands of savers who are already up in arms about rates on savings.

So another month or so would give her an even better deal.

beecher

It is a gamble - NatWest might only bring better deals in for people with low LTVs. In six month times she might be in negative equity and unable to fix again. Personally I'd say she should take the 4.69% as she prefers the safety aspect.

sva14

Thanks for comment and sorry for error in the post format.

The rate Natwest offering on 5 yr fixed rate to her is 5.04% not 4.89% as quoted earlier.

Her SVR at moment is 4.00% and if natwest pass full rate cut it will be 3.50%

I spoke to natwest today and said following the boe cut will the fixed rates go down a a little . The advisor said NO, he said fixed rate have no bearing on BOE and have not done so for 6 months and it is only affected by market conditions and availability of fixed rate funds.

Based on this I am a bit unsure still what to do wait 6 months, but I don't want to risk BOE climbing up and missing out on 5.04% as the monthlp payment of £428 is just right for her any more and it be difficult?

WaveyDave_2

Can I ask what LTV she has, as the only 5 year fix I can see on the NatWest site is nearly 6% with up to 85% LTV.

sva14

Her LTV is 95%.

See below click the exisiting customer changing deal tab

5.04%

http://www.natwest.com/personal/mortgages/g3/fixed-rate.ashx#tabs=3