To re-mortgage or stay put?

Paul_T_Newby

Hello all, our 5 year fixed rate (4.9%) with Nationwide is set to expire in December.

I have been advised if we stay put and just allow the mortgage to fall onto the tracker rate it will fall to 2.5% this is with around £85k of mortgage left to pay.

Am I likely to get much of a better deal if I shop around else where, are the fees to move going to cancel out the saving over say a two year period?

If we just allow the mortgage to fall onto the Nationwide tracker mortgage then we decide to shop around at a later date would this be possible, or would we be ‘locked’ in for a set period of time?

As you can probably tell this is our first mortgage renewal and have many questions!

Many thanks

Paul

runninglea

Hi - With a tracker mortgage the rate will be 2% plus the bank of England Base rate i.e. 0.5% thus giving you 2.5% at present.

The mortgage payment on interest only will be about £160 - £170 per month will the difference being your repayment of capital - bringing the 85K down over the term of the mortgage.

At present if you move you will probably have set up fees and also a valuation required etc even though mortgage companies might pay these.

I would stay where you are as it looks like the interest rate will remain at 0.5% for the immediate future.

If you can afford the 4.9% repayments I would continue to pay the same amount as you are doing even when your rate goes down. This will mean that each month you are paying more capital thus the 85K getting reduced quicker.

This is assuming you can afford to do so and not planning new car, kitchen etc.

What is your monthly payment at present and how much is it going down to?

dimbo61

2.5% is a great rate so got onto the Nationwide tracker rate and overpay while rates are low.
yOU WILL NOT BEAT 2.5% with another lender

Paul_T_Newby

Thanks for the replys, we are currently paying £550 a month not 100% sure what it will go down to at renewal (capital re payment)

I was looking to keep paying the same amount each month we are now as would make sense to reduce the capital as much as we can.

Would this make much of difference over say a two year period?

cheers

Gorgeous_George

Search the forum for locoblade's spreadsheet.

Essentially, I would only overpay if you cannot save at 2.5% net (i.e, after tax) elsewhere. I would cherish that 2.5% Nationwde product but keep an eye on any base rate movements. It is worth remembering that the Nationwide SVR is effectively a tracker CAPPED at BofE +2%. Unlike a normal tracker, when rates rise, that 2% differential could reduce. In summary, the Nationwide 2.5% SVR is at least as good as (and possibly better than) a 2% base rate tracker.

GG

InMyDreams

Gorgeous_George wrote: »

Search the forum for locoblade's spreadsheet.
GG

It's here :https://forums.moneysavingexpert.com/discussion/1157173

(I have it bookmarked)

In fact, why is it not a sticky?

Paul_T_Newby

Thanks for the info food for thought

Are banks still offering fixed rates of upto 5 years?