Your advise is appreciated

mambo69

Ok here is the scenario

I currently have 3 mortages (main and 2 additions) with Nationwide, 2 at 2.49 and 1 at 4.49 costing me £506 per month, with just under ten years to go. I also have a loan with around 4 years to go costing me £306 per month, so total is around £812.

If I went for the 2 year fixed at HSB and combined the lot at 4.29% on the fee free deal then I end up with extending the years to 15, which initially costs me £498, a saving of £314. If I then overpayby 1/2 my saving i can reduce the lenght to just under 10 1/2 years.

My query is does is make sense? I know it seems to financially, but of course the offset is I am paying back over a longer term

all advise is welcomed

Spangled

Are the Nationwide mortgages fixed or trackers? Do they have any ERCs or exit fees? And how much does the HSBC fixed deal allow you to overpay by? (Looking at their site, you can usually only overpay by 20% of your normal monthly payment on their fixed deals, ie £98 a month.)

Personally speaking, I don't see the value in two-year fixes. 1) You'll need to remortgage (and pay another arrangement fee) in two years' time and 2) You *could* be ending that two-year fix just as the BoE base rate starts to go up (or indeed has already gone up), leaving you to potentially remortgage at an even higher rate.

Thrugelmir

Why do you want to remortgage onto a longer term, only then to overpay and reduce your mortgage term back to what is already is?

You are not saving in the longer term. As you'll be paying more interest.

As one loan ends in around 4 years. At that point your outgoings reduce by £306. What interest rate do you have on this loan?

mambo69

the other loan is around 7.9% (AA loan)

Main mortgage with Nationwide is on SVR, as is one additional the other is a tracker. No ERC on the main one not sure about the tracker.

I understand about the longer term more interest, but i pay 54% of my take home salary out on the mortgage and loan, if i put it all in one pot it reduces to 33%

Thrugelmir

mambo69 wrote: »

the other loan is around 7.9% (AA loan)

Main mortgage with Nationwide is on SVR, as is one additional the other is a tracker. No ERC on the main one not sure about the tracker.

I understand about the longer term more interest, but i pay 54% of my take home salary out on the mortgage and loan, if i put it all in one pot it reduces to 33%

You may a fairly hefty penalty (settlement fee) to exit the AA loan.

Once lost you'll never get back onto the Nationwide SVR. Something to consider very carefully.

You could ask the Nationwide will extend your mortgage term. This would reduce your monthly outgoings until such time as the AA loan is repaid. This way you wouldn't incur fees in transferring your exising debts onto a new mortgage.

mambo69

I had not thought about extending the term, if I went up to 15 years would bring that one down by around £100 per month

getmore4less

Whats the objective? this will determine the best options

To optimize the debts.

The 2 SVR rates extend as long as they will let you they are the cheapest.

Check the penalties on the tracker and the loan this will determin the best thing to do with those.

If there are no penalties extend the term on the tracker and overpay the AA loan or shorten its term.

Review if rates change or when the AA loan gets paid off.

The overpayment option gives you the flexability to either spend or overpay on a month by month basis

The more you spend the longer you have the debt.
It all about priorities.

Thrugelmir

getmore4less wrote: »

Whats the objective? this will determine the best options

To optimize the debts.

The 2 SVR rates extend as long as they will let you they are the cheapest.

Check the penalties on the tracker and the loan this will determin the best thing to do with those.

If there are no penalties extend the term on the tracker and overpay the AA loan or shorten its term.

Review if rates change or when the AA loan gets paid off.

The overpayment option gives you the flexability to either spend or overpay on a month by month basis

The more you spend the longer you have the debt.
It all about priorities.

The AA loan will unlikely to be flexible in any form. The worst option is to refinance this, better to juggle other committments to allow this to run natural course.