nationwide, existing borrowers on fixed deals

bundance

Last year, I contacted the nationwide to see if there was any better deals than my 5.18% fixed rate mortgage which runs till 2016.

I was told I could switch to other deals within the nationwide, and got sent out a form, but I decided against it.

This year, I had a look on the website, as I was beginning to wish I had made my mind up and switched last year. Hoping to catch some more competitive deals while interest is low, I visited their website.
They must have changed the rules, because I was met with this
Please note that you cannot switch to an alternative Nationwide product before the end of your deal period

Seems that its now not possible.

I have a couple of questions, one regarding the above. Dunno if its askable but I will ask anyway-
Might they change the rules back?
I realise these are unprecedented times for the economy, so no worries if you feel its a bit of a crystal baller.


My other question is, By 2016 my payments will have eaten into my capital, so, because I am paying at 5.18% interest, does that mean, by 2016, I will have eaten into more capital, than if I were to be paying a lesser rate of interest?

I've had mortgages before, but they have always made as much sense to me as circular squares.

thank you

beecher

They might change the rules back in the future - who knows - but they've had this policy for quite a while now.

Paying more interest doesn't mean you pay off more of the capital - it just means you're paying more interest.

Joe_Bloggs

Mention the full term of the mortgage left to run. You say you have a fixed rate until 2016 but how many years after this rate does the mortgage last. If you can access your mortgage screen via a computer it will be the agreed redemption date bottom right of the screen. Also mention the repayments you are making. It should then be easy to workout how much your repayments will eat into the capital over time.
J_B.

bundance

Joe_Bloggs wrote: »

Mention the full term of the mortgage left to run. You say you have a fixed rate until 2016 but how many years after this rate does the mortgage last. If you can access your mortgage screen via a computer it will be the agreed redemption date bottom right of the screen. Also mention the repayments you are making. It should then be easy to workout how much your repayments will eat into the capital over time.
J_B.

It runs till 2025.

Thanks,
my question has been answered now.
I think that after about ten years you start paying more capital

Trying_to_be_good

You pay back a little more capital each month of your regular payments. The regular payment figure is calculated using a formula to give the same monthly figure for the life of the mortgage (whilst the interest rate remains the same), but the proportion that is paying back capital therefore increases over time.

If you overpay (the Nationwide upto £500 per month) that will come straight off the capital.

You only pay interest on the capital you owe, so the faster that reduces, the less interest you pay.

Joe_Bloggs

@bundance
The mortgage has always been a source of irritation and worry. I have always had online access so I could see the amount every day if I wanted to. I didn't like being charged so many pounds and so many pence each month so I chose add a small overpayment to make a more interesting total . Instead of paying 641.36 I would overpay a bit to make it 678.90 or even 666.66.

The other thing I would do is take comfort in passing through the thousands on the mortgage total. If you are on £41156 now then you should break the 41K target in August the 40K target by Mar 2010, the 39K by Oct 2010 . So every 7 months a thousand drops off the capital.
J_B.