Nationwide BMR or fix - how to decide? Thoughts please

Thrugelmir

apples1 wrote: »

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

If a full application has not been made then the offer could be withdrawn prior to the expiry date of the MIP. As limited tranches of funds are often attached to fixed term mortgages. An offer is not the same as a guarantee of available funds.

apples1

Thrugelmir wrote: »

If a full application has not been made then the offer could be withdrawn prior to the expiry date of the MIP. As limited tranches of funds are often attached to fixed term mortgages. An offer is not the same as a guarantee of available funds.

A full appplication has been made. The offers are guaranteed until the expiry date printed on the offer. It says so on it!

raelill

Hi
I could do with some advice re our fixed deal coming to an end.

We have borrowed about 40% of value of house and have just finished a 2 year fixed at 6.08%. We've been offered BMR of 2.5% bringing our monthly payments down significantly.

Our predicament is that I am currently on zero pay maternity leave due to go back in November. To cope with the bills Nationwide agreed to take a reduced amount for 3-6 months. Of course we're accruing arrears - 2 month's so far.

With this new rate we can just about afford to pay the new amount which I'm very relieved about as I do not want to incur any more arrears if I can help it.

However, that still leaves over £1000 in arrears before our Mortgage account is back on track.

Do I / can I add these arrears to our existing account with a new deal and if I can are we likely to be turned down because of the arrears. If we were turned down what do I do then? Should I look for a fixed rate now or wait till we've cleared the arrears as this will improve our credit rating? We've been with Nationwide for over 12 years if that makes any difference?

Hope this makes sense and someone can advise me.

Thanks
Rachel

apples1

having a mortgage holiday is not the same as being in arrears. there is nothing you can't do now that you could have done pre mortgage holiday altho you are right to get back to paying as soon as you can. I had a year off paying when my first was born and went onto interest only when my second was born. Nationwide were happy with that both times. It does mean the longer you have off paying the more you owe as the interest keeps adding onto your loan but worth it in my view to be with your baby. We are well back on track now.

TeddyBear_2

apples1 wrote: »

Please could someone explain what are

Base Mortgage Rate

Standard Mortgage Rate

Standard Variable Rate

I have a 5 yr fix with Nationwide which ended last month. Now reverted to it's the BMR. I have seen something that I think said that the BMR is better than most SVRs. Their website also talks about SMR - is that the same as a SVR? I'd like to know what the differences are for my own general knowledge and because I have two firm offers for new 5 year fixes (with NRock and Natwest) and I am sitting tight for a month or two as they are valid for 12 weeks. Just starting to wonder if maybe I should stay put on the BMR if it's something good?!!

The offers I have are for 4.69% for 5 years. The BMR I have just moved onto is 2.5%. What would the Bank of England base rate have to go up to before I would have been better off fixing at 4.69%? Is that likely? I do appreciate you don't have a crystal ball but what is the current thinking? I have £180k mortgage and over 40% equity.

In your position, I would be inclined to shop around, even if it is financially viable to jump ship from the Nationwide. Obviously, bear in mind the effect of the credit crunch on lending, and seek financial advice before you make your final decision.

I have been a customer of the Nationwide Building Society for approaching 13 years and my personal opinion is that more recognition should be given to existing customers for their loyalty, so after a conversation with them today about increasing my £37,000 mortgage by £5,000 (in which they wanted to levy a fee of £995 on a 2 year or 3 year tracker mortgage) I was left wondering what exactly would be the incentive to remain with the Nationwide if the same deals on the table for me are also on offer to new customers?

I can understand that new customers might feel differently about this, but from my own point of view, it is a sore point, having given them nearly 13 years of loyal and trouble free custom.

samnorris2

Rachael,
If you are just meeting your payments you could ask them to extend the term length by a year or two just to allow you to reduce the monthly payments and allow you to catch up. Once you're back at work you can then reassess and reduce the term again. You can do this when you want without any fees etc.


Teddy,
I'm with you. I've not been with Nationwide quite as long as you, only 4 years. However I'm coming to the end of my second term with them and had done a seacrh to get an idea of rates in the market and saw some slightly lower rates. One was about £1200 but I liked the flexibility I had with NW and a reserve pot I built up of overpayments. So I asked them about switching deal, told them I had seem a lower rate and was interested to see if they could do away with the £995 fee for a loyal customer and I'd be on board by October for another 3 years paying 4.98% interest.
So now I'm thinking I'll drop onto the BMR at 2.5% which will have saved me £900 by January (that's the £995 fee they could have foregone) and I still have the flexibility to shop around for another few months.
There is a lot to be said for rewarding loyalty in times like this.

Sam

Thrugelmir

samnorris2 wrote: »

Teddy,
I'm with you. I've not been with Nationwide quite as long as you, only 4 years. However I'm coming to the end of my second term with them and had done a seacrh to get an idea of rates in the market and saw some slightly lower rates. One was about £1200 but I liked the flexibility I had with NW and a reserve pot I built up of overpayments. So I asked them about switching deal, told them I had seem a lower rate and was interested to see if they could do away with the £995 fee for a loyal customer and I'd be on board by October for another 3 years paying 4.98% interest.
So now I'm thinking I'll drop onto the BMR at 2.5% which will have saved me £900 by January (that's the £995 fee they could have foregone) and I still have the flexibility to shop around for another few months.
There is a lot to be said for rewarding loyalty in times like this.

Sam

I'm unsure as to why you expect the Nationwide to give you preferential treatment. Your loyalty to them only extends as far as them having the cheapest deal. Or you would move elsewhere.

Loyalty should be given to savers that fund the mortgages advanced!

belfastgirl23

In case you're still thinking about it

http://www.guardian.co.uk/money/2009/jul/18/mortgages-trackers-fixed-rate-interest-security

proxima_2

We just came off a fixed deal of 6.45% onto the Nationwide BMR of 2.5% and it's saving us £450 a month in interest.

However I plan to stick with the BMR for a while and overpay each month to build up some equity.

Given the recent press reports, it would seem likely that the base rate will stay low for at least another few months so I am willing to take the risk of the variable rate in order to benefit from the low BMR.

I doubt that'd really help in making your decision, but I find it can be helpful to know what others are doing in a similar situation.

Radionotme

I know if it was me, I'd be sticking on the BMR for a while. Unfortuantely my two fixed rates (5.48 and 5.98) are fixed until July and September 2012 respectively. Somehow I can't see today's favourable rates still being available then!

As has been said, there have been discussions of the BoE rates staying at 0.5% for a long time, Ernst and Young reckon until 2014 for example (although personally I'd be very surprised if that were the case). Discussions like that are likely to keep LIBOR low, and that's what effects the fixed interest rates more than most other factors. Try and keep an eye on LIBOR, and when that starts going up then consider switching. In the meantime make the most of the low BMR by overpaying what you can - then when interest rates go up later you'll be far better prepared.