Dilema stick on Nationwides SVR 2.5% or fix

roger107

Hi im in dilema.. after reading the sunday papers it seems all the advice is to get a 5 year fixed rate ASAP. Im on nationwides SVR of 2.5% the best deal I can find is 4.39 fixed at hsbc. Should i go for that or stick on the 2.5% for a bit and ride it out - im just worried that in a few months there will be no cheap deals around. Moving to HSBC will cost me £290 a month. but I guess im paying for security.

help

foreversummer

Hi

There are several threads on this board that discuss this issue. One of them is here:

http://forums.moneysavingexpert.com/showthread.html?t=1695759

Hope that helps.

Foreversummer

mahdlo

roger107 wrote: »

Hi im in dilema.. after reading the sunday papers it seems all the advice is to get a 5 year fixed rate ASAP. Im on nationwides SVR of 2.5% the best deal I can find is 4.39 fixed at hsbc. Should i go for that or stick on the 2.5% for a bit and ride it out - im just worried that in a few months there will be no cheap deals around. Moving to HSBC will cost me £290 a month. but I guess im paying for security.

help

how much equity do you have?

if you're sub 50% LTV you could probably argue it's worth the risk to stay on SVR for the foreseeable, however, I'd still recommend securing yourself a good fixed rate just in case. you won't need to ultimately proceed with this if, for instance, in 3 months time nothing has changed. just make sure it won't cost you anything to walk away from the lenders offer - in this case HSBC.

if you're above 50% LTV, I'd go for the fixed. your mortgage offer will be valid for usually 3 months, so secure the rate then drag it out as long as poss.

also bear in mind that Nationwide will no longer make this "Base Mortgage Rate" which is guaranteed to be no more than 2% above BOE base rate, available to new customers, i.e. people taking out Nationwide mortgages from hereon in, it has been replaced by a "Standard Mortgage Rate" which is currently 3.99% (although no body is actually on it).

that tells me a 2.5% SVR is not profitable and that they also expect BOE base rate to stay low.

mine_only

roger107: We are in the same boat as you. Paranoid about rates going up, yet can't find anything that can beat BOE +2%.

am tempted to go for a 10-year fix of 4.99 (various banks offering this now) or offset with first direct (fixed rate of 2.99 for 2 years). for us, the downside of the First direct offer is that we will have to withdraw part of our ISAs to use as an offset. We don't really know what it means to "lose" previous years allowance. Who knows, maybe could re-invest in ISAs once mortgage paid off?!

roger107

Thanks everyone.

I have a LTV of about 65% - assuming they take my previous valuation minus the %age fall in house prices.

I didnt think of that getting the mortage approved and then sitting on it for 3 months. Guess I have to go through the motions and get it all agreed, get the mortgage offer through the post (which will hopefull day this offer is valid for 90 days) and then do nothing until day 80 or somthing - thus bying me a bit of breathing space.

Is that correct?

roger