Exiting 5 years fixed mortgage 2 years early

floppomoppo

Hello All

It seems every financial decision made in the last decade or so has been wrong, so any experiences/thoughts shared would be most welcome.

I am in year 3 of my Nationwide 5 year 5.29% fixed repayment mortgage and looking longingly at the 4.64 2 year fix from A&L (if not others).

Having decided NEVER to sign on the proverbial dotted for 5 years (; 18 months for mobile phones...) again, what do you rate the chances of persuading NW to transfer me to another product rather than leave them all together and bite the £4k plus redemption hit?

afro_2

Not sure what your chances are, but the charges and cost of moving may be higher than the saving on interest! make sure you do your sums correctly!

regularsaver1

you entered a contract so doubt they'd do anything about the fee as you'd be breaking the contract

floppomoppo

I was kind of hoping they would prefer to make some money rather than lose the whole mortgage although at the moment there seems to be plenty of mortgage demand reported in the press.

Mrs_Optimist

You will have to pay the redmeption penalty if you decide to change, otherwise surely everybody would be doing it Calculate if you would actually be saving anything if you did switch, £4k is a lot of money to pay out, as I am sure you are aware.

Ian_W

No harm in asking NW if they will allow you to transfer to another of their products - they can only say no and probably will, but "don't ask" and all that.

Wouldn't do it on the basis that you'll move elsewhere as I think NW will find plenty of solace in the £4K penalty if you do move.

roswell

is your rate so bad though if the BoE rate goes to 5% next month your only going to be paying .29% more than BOE and i dont think that rates are going to be coming down in the short term so it may be that exit fee + new arrangement Fee = more Money lost than saved in the next 2 years

dwsjarcmcd

short answer - nil

floppomoppo

Mrs O...Yes, I think the 4K is quite a hurdle too...

Ian W...Totally agree, would not approach NW bullishly, not with a 4k hammer in their hands...

Roswell...Well put! Seems unfriendly though to hope for further rate increases to make me feel better.......Rate history is reported as still showing variable rates as being the best over time though - taking out the extremes of course.

floppomoppo

Oh drat.............

Just found a calculator on Charcol's site which says moving from a 5.29% to 4.89% for the remaining 13 year term would only save £325 a year!!!

Obviously this makes ANY redemption penalty a no-go. So unless NW say yes with no redemption, in view of the reported impending 0.25% rate change I guess I'll be staying where I am.

Thanks to all for your insights.

roswell

Sorry I didnt mean to be unfriendly its just my opinion i may be wrong but with so much speculation of the rate hitting 5% next month I thought it best to show your rate may not be that bad.