Nationwide BMR or fix - how to decide? Thoughts please

koexelek

Trying_to_be_good wrote: »

The 2 percentage point guarantee is, however, costing Nationwide a fortune, but they don't/won't/can't break that guarantee.

It's a cracking deal, and they know it.

I am advising all my clients to stay on it, unless they are prepared to pay significantly more for the security of a fixed rate

apples1

Phoenix-1 wrote: »

.... is to defer the offer (nearer the expiry time)

Hi there mortgage buddy! Yes I agree we are pretty much in the same boat! My partner is also v worried about taking the risk on not fixing. Quick question ...when you say defer the NR offer until nearer the expiry time so you mean that near expiry you will ask them to extend the offer time?

apples1

Radiantsoul wrote: »

Assuming you have 20years to go, you can accept interest rates of 7.5% before it hits £1450 per month. That means a base rate of 5.5% or fixed rates being quite a bit higher.

If you stick with the 2.5% variable you are currently paying about £950 and so would reduce the mortgage by about £450 per month if you overpay as you have been. Moving to fixed rates would increase your payment to £1150(plus there might be an arrangement fee).

If I were you I wouldn't fix as interest rates are unlikely to rise over the next 6months and the flexibility to overpay has value to you(although you can overpay £500 per month with NW). You have a decent cushion for rate rises the benefits of not fixing are quite high...

Hi there, I can overpay unlimited amounts without penalty on the NRock fix or the Nationwide BMR so the overpayment thing is not an issue. I have about 17 years left on mortgage. monthly payments in BMR are about £1132. Monthly payments on NR fix are quoted as £1395 (although it will be a little lower as I actually don't need to borrow the full amount I applied for as used my Dec 08 mortgage statement closing figure to get my application figure and I've obviously reduced the balance a bit since Dec last year. You are correct there is a fee (almost £1k) for the NR fix.

Does your figure of base rate going to 5.5% still hold now you know more of my numbers? It seems unlikely to me (what do I know?!) that BOE base rate will go from 0.5 to 5.5 in next five years???

apples1

koexelek wrote: »

It's a cracking deal, and they know it.

I am advising all my clients to stay on it, unless they are prepared to pay significantly more for the security of a fixed rate

That's v reassuring and encourages me to stay put. Especially as I assume you would get commission if you found your clients a new product! Can NW pull this or are they bound to keep it? Is it guaranteed?

SmileyG_2

See this for the suggested way forward for interest rates ......

http://www.thisismoney.co.uk/interest-rates

SmileyG

hethmar

Has anyone looked at NW's capped tracker? Hefty fee but seems good and an option to swap to a fix at any time with no charge?


2 Year Tracker
Minimum deposit 5%
Base rate differential
+2.49%
Reservation fee* £999

Initial rate 2.99%
capped at 3.99%
Followed by the SMR, currently 3.99%

koexelek

apples1 wrote: »

That's v reassuring and encourages me to stay put. Especially as I assume you would get commission if you found your clients a new product! Can NW pull this or are they bound to keep it? Is it guaranteed?

I think they are bound to keep it UNLESS YOU MOVE HOUSE. Then they can force you to go on to an inferior deal.

Although I like to earn commission, the clients best interests come first :cool:
By giving the best advice, ( but earning nothing) I retain the client long term, as they know they can trust me.

Do the wrong think, and you'll lose them

Joe_Bloggs

The Nationwide did not have to make their BMR terms the way they are. They chose to do this. They have to redistribute profits as they are a mutual society.
The profits of the business seem to eventually find their way back to the members who have stuck with the society for a long period.

In general, other lenders appear to reserve the right to charge whatever they can get away with in the terms of their SVR given 30 days notice or a set period of time. Is this freedom to charge whatever rate they want fair ? Should mortgage borrowers know what factors will influence their future SVR before they sign the contract ? If not then it may be in the domain of unfair terms and conditions.
J_B. (Just my View)

Thrugelmir

You say you have 2 mortgage offers. Have you paid the product fees yet?

apples1

Thrugelmir wrote: »

You say you have 2 mortgage offers. Have you paid the product fees yet?

No but have both written offers. One valid until Sept, one till Oct.