Not too clued up on mortgages, any advice

petrolhead69

My 2 year fixed 6.01% finished in january and we have dropped onto Nationwides 4.4% variable rate, Our house is worth approx £120k, we`ve owned for 4 years and it`s our first house. The balance is down to £94k due to having a good couple of years overtime and making lots of overpayments, but not exceeding the £500/month amount where overpayment fees are incurred. Does anyone knowledgeable about these things have any suggestions at to where we should go from here, and the reasons behind the suggestions so I can try to get my head round it.

We`re putting the overpayments on hold until september as in the 9 years we`ve been together we`ve only had 2 fairly crap holidays and we both work very hard (80 hrs a week often) so this year we`re going all out and going to florida no expesne spared. After september it`s back to the overpayments and we`re going to try to keep up the full £500/month overpayments to get it paid off as soon as possible, but we would rather keep the mortgage term long and shorten it by overpayments rather than dropping the terms just in case one of us are made redundant so we can drop the overpayments and only pay the small payment. We have a flawless credit history.

Any questions that would help with suggestions just ask.
Cheers.

beecher2

I think you're quite right to have the holiday this year as a reward for overpaying and working so hard.

I wonder if it is worthwhile investigating putting your holiday on a 0% credit card and keeping going with the £500/month overpayments in the meantime. The only reason I say so is because you could get down to a 75% LTV quicker by doing so, which means you'd be able to get a new deal before interest rates go up again. The timing might be off, and the calculations might not work out, but I think you should look into the option to see if it is worthwhile.

petrolhead69

I`ll look into it. I might struggle to get the wife on board though as she wants to be able to "see" the holiday fund grow. How big is the saving going to a 75%LTV, as my CC has a £13000 limit and no balance would the saving be enough to put the difference on CC very short term?

Gorgeous_George

Double check the Nationwide variable rate. I believe you should be reverting to Nationwide's 2.5% BMR. If this is the case then your rate will effectively be a tracker at BofE base rate + 2%.

Do not be hasty until you are 100% sure of what you will be giving up.

Additionally, once you are out of the fixed rate you can overpay as much as you want without penalty (link).

Nationwide's_website wrote:

Please note that any mortgage products reserved on or before 29th April 2009 revert to the Base Mortgage Rate (BMR). If you choose to switch to a new Nationwide mortgage product, the new product will revert onto our Standard Mortgage Rate (SMR).
Both are variable rates which we may vary in accordance with our mortgage terms and conditions. However, the BMR is guaranteed to be no more than 2% above the Bank of England base rate, whilst the SMR has no upper limit or cap. If you choose to switch to a new product, it is not possible to switch back to the BMR at a later date.
On both the SMR and BMR there is unlimited flexibility so you can overpay by as much as you like, when you like.

GG

petrolhead69

I dug out the paperwork and it turns out the man I spoke to over the phone at nationwide was talking out his !!!!, He was trying too hard to sell me a fixed rate at 5 or so percent and was economical with the truth.
I am actually on the 2.5% BMR down from a 6.08% 2 year fixed. I feel a bit of a !!!!!! for writing down what this guy said and taking it at face value. A lesson learned. Obviously these figures will have an impact on where I go from here. I didn`t know the overpayment ceiling was removed, I`m fixing up a car to sell so if the florida fund is looking OK I can chuck some of the money from that to the mortgage too immediately.
Thank you very much Gorgeous George.

[Deleted User]

Just to reiterate what GG quoted, if you ever move off Nationwide's BMR Variable rate to go onto another deal, then you will not be able to move back to this rate afterwards. You would move onto the new SMR variable rate which has no upper limit and is currently higher than the BMR at 3.99%.
For this reason, although I am tempted to take out NW's 3 year fix, I have resisted the temptation.

before_hollywood

Gorgeous_George wrote: »

Double check the Nationwide variable rate. I believe you should be reverting to Nationwide's 2.5% BMR. If this is the case then your rate will effectively be a tracker at BofE base rate + 2%.

Do not be hasty until you are 100% sure of what you will be giving up.

Additionally, once you are out of the fixed rate you can overpay as much as you want without penalty (link).



GG

gg is i could thank you multiple times for that i would :beer:

i'm on a bmr tracker too, i have 2 and a bit years till my fixed rate ends, which makes things a lot simpler when comparing to what is available elsewhere (well as simple as it could ever be with something that tracks base rate :rotfl:

Gorgeous_George

I thought that this thread was worthy of a bump but also I wanted to add that the BMR is effectively a tracker capped at BofE +2%. Therefore, the BMR could track at less than +2%.

GG