Nationwide 5 yr fix Now or Wait?

MX5huggy

I was geared up to take NW's 5 year fix at 4.88 then it went to 4.68 now back up to 4.98.

They are sugessting going on to 3yr tracker at 3.08% and that I can switch to the 5 yr fix at anytime (for a fee).

Basicly if I go on the tracker for 6mths I cover the extra fee. I would only do this if there is a good chance of the 5 yr fix falling?

All to get away from A&L's 4.99% SVR (under review)

Robert_Sterling_3

Very interesting.

MrMajic

I've just seen the Post Office - they're offering 4.19% for 5 years.

MX5huggy

Robert give me just a little bit more than that!

Robert_Sterling_3

MX5HUggy.

I thought you post was interesting because although you told us quite a lot you did not ask a question.

MX5huggy

The question of is where are 5 yr fixes headding in particular NW's?

Was the rise to 4.99 the start of trend?

Did they have just use up a lump of money that they had avalible, will they get some more?

CJBeee

I am a bit miffed at the Nationwide increasing their 5yr fixed rate as well. I am coming to the end of a fixed rate and saw the rate of 4.68% advertised a week ago. I decided to see if it would come down any further, but it has increased!
I would like to know if anyone thinks they will reduce it now that bank of england reduced rates on Thursday or is the only way up from here.

opinions4u

I think we're pretty close to the bottom for fixed rates of 5 years or longer.

They are sugessting going on to 3yr tracker at 3.08% and that I can switch to the 5 yr fix at anytime (for a fee).

Assuming, in 6 months time, they have a 5 year fixed at a rate you want to pay. What if 5 year fixed rates are 6% then?

I thought you post was interesting because although you told us quite a lot you did not ask a question.

Actually the title of the post was "Nationwide 5 yr fix Now or Wait?". I like the humour, but on this occasion it was misplaced!


Standard variable rates are going down. But savings rates can barely be cut any further, so the cost of reducing SVR has to be recovered somewhere else. Widening the profit margins on new fixed and tracker business would be how I go about this if I was running a bank. Given the low volume of new lending going on at the moment this isn't going to be easy to deliver.

If there are any cuts in 5 year fixed product rates, they will be small. More likely is that they simply won't happen and any reduction in LIBOR will simply prop up the banks reduced margins in other parts of their mortgage book.

Heyman_2

What the banks have done is to actually increase their margins on Mortgages despite the cuts in Interest Rates, and you can bet that when rates start to rise, all Mortgage rates will rise at pretty much exactly the same rate.

I think that once this starts to happen we will be in for historically high SVR, Tracker and Fixed rate deals becoming the norm. They stand to make a killing on current tracker margins (up to 3% above base in some cases), assuming of course, people can make the repayments :eek:.

opinions4u

Heyman wrote: »

What the banks have done is to actually increase their margins on Mortgages despite the cuts in Interest Rates

I think you'll find the profit margins on mortgages are deteriorating fast as more and more people default. There's a recession on don't you know! This alone is a reason to widen margins.

and you can bet that when rates start to rise, all Mortgage rates will rise at pretty much exactly the same rate.

Probably. The banks have things like Gvoernments to buy out. We now have significantly less competition in the market place too, so in times of recovery competitive pressures won't be anywhere near what they were 2 years ago.

I think that once this starts to happen we will be in for historically high SVR, Tracker and Fixed rate deals becoming the norm. They stand to make a killing on current tracker margins (up to 3% above base in some cases), assuming of course, people can make the repayments :eek:.

Don't know about historically high, but I don't doubt that we will see sharply higher rates within 24 months. From an affordability point of view, lower house prices will offset much of any increase in interest rates.

Forever_Red

MX5huggy wrote: »

I was geared up to take NW's 5 year fix at 4.88 then it went to 4.68 now back up to 4.98.

All to get away from A&L's 4.99% SVR (under review)

If you have a good LTV (60%) you could look at HSBC 5 year fix 3.99% with £999 fee.

HTH

http://www.hsbc.co.uk/1/2/personal/mortgages/remortgage/fixed-rate;jsessionid=0000hrkBenBE0Eq59nPfzhuJUIH:12c5cbtmp

Alan