Fixed rate period ending, what should I do?

grabla

Some advice please. My 4.95% 5yr fixed rate with the Nationwide is ending this month (endowment mortgate, 12 yrs left to run, red letter shortfall etc).

My wife wont be returning to work for at least two more years (Both kids in full time school by then)

Should I just enjoy the 2.5% (or whatever) Base rate (approx £138 per month), or fix again for another two years? At Base rate + percentage?

TIA
Graham

HarrowArrow

Enjoy the wonderful 2.5% and keep a close eye on what's happening with fixed rates and what Mervyn King is saying...

dimbo61

You have had the RED letter I would ask my lender to keep the mortgage payment static and therefore be overpaying the mortgage each month!
( if you can afford to and have no other debts like loans/Credit card debts to pay first).
If you have managed the mortgage payment each month for last 2/3/5 years you will feel no difference.
What is important is that you can clear the mortgage before the kids leave school and start at university !!!
This is only my opinion and you could spend the extra money on a nice new TV, holiday, nights out or just go down the pub

savemoney

I cant see interest rate jumping up for some time and I heard that there isnt that much competition or will to reduce rates in short term. if you do go fixed its probably best going for 5 years due to fees they charge

I am sticking on SVR at mo, no incentive to leave, been on svr since middle of last year

grabla

dimbo61 wrote: »

You have had the RED letter I would ask my lender to keep the mortgage payment static and therefore be overpaying the mortgage each month!
( if you can afford to and have no other debts like loans/Credit card debts to pay first).
If you have managed the mortgage payment each month for last 2/3/5 years you will feel no difference.
What is important is that you can clear the mortgage before the kids leave school and start at university !!!
This is only my opinion and you could spend the extra money on a nice new TV, holiday, nights out or just go down the pub

Overpaying, thats not a bad suggestion. So stick with the present £250 a month, and ask them to take the £112 overpayment as an 'overpayment'. :cool:

I'm making £500 payments here and there, to reduce the capital anyway, and I've other investments in place to offset the debt eventually, and > £40K in bonds, ISAs etc.

A Red letter doesn't always guarantee a missold endowment, as many are realising.