Dual mortgage help required please

Exemplar

Hi All,

About 3 years ago we moved house. When we did we took out a second mortgage with Nationwide to cover the difference between our existing mortgage and the house price. Therefore we currently have 2 mortgages, both with Nationwide. Currently we have about £101K on 1 and £364K on the other. The £101K one is in my wifes sole name and the £64K one is in our joint name. There is also an early redemption charge of £1800 on the £64K one (which I presume we can just add to another?).

Now heres the issue!

Both mortgages are at 5.9% and we want to reduce that by going to a different mortgage.

We asked Nationwide if we could change the mortgage or reduce the rate, they said no. We have to leave them as they cannot just swap a product.

Has anyone had any experience of doing this? Pitfalls? Advice etc?

Many thanks

Alex

TrickyDicky101

When I recently (September) approached the Nationwide about increasing our mortgage and porting the existing balance to another (more costly) property I was assured that the existing mortgage conditions would continue (I am on the BMR for this so I was concerned about keeping it and not going on to the less favourable SMR). This would also mean I could overpay on this element of the mortgage without any penalty. If the same applies to you, you could perhaps pay off the £101k with a new mortgage at more favourable rates? This would then just leave you with the £64k lump at 5.9%.

You do need to provide more details as Opinions4u stated though.

silvercar

I suspect that both mortgages are now in joint names. The property must be in joint names to secure the 64k mortgage (I'm guessing the £364k is a typo), so logically the first mortgage will be on the original deal but now held under the same charge. So you really have one mortgage with two parts with slightly different terms.

No harm in moving to a different lender, just make sure you include all the costs of leaving in your calculation to see if its worthwhile.

getmore4less

Need details of the product and the follow on rates.

Exemplar

Are both these debts secured on the same property? - YES

If so, I'd expect there to be a single mortgage, in joint names, with two different mortgage products running alongside each other. - Nope, 2 separate

Fixed or variable? Until when? - fixed, due now for 1, other in 2 years

Costs of penalties and organising the new mortgage may outwieght the saving in rate of changing lender.

How much is your property worth? - £190k (thats the going price of smaller properties on same development)
How much do you owe in total (£465k?)?
What are your incomes? - £30K and £25K
When are their no penalties on your existing 5.9% products?, none on 1, 2 years on second

Answers to these questions will help posters to make suggestions. - hope that helps....

getmore4less

Whats the follow on rate on the 1st(£101k?)

You have to be clearer on the deatail of what you have.

If the £101k is out of penatly and goes to the Nationwide BMR of 2.5% then there will be no point is switching, that is a good rate allready.

Exemplar

Hi Getmore4less. I agree, but I had a long telco with them the other night and they were very clear in their statement which was 'to achieve a better rate you have to go elsewhere'.

Hope that helps

Alex

getmore4less

alcot33uk wrote: »

Hi Getmore4less. I agree, but I had a long telco with them the other night and they were very clear in their statement which was 'to achieve a better rate you have to go elsewhere'.

Hope that helps

Alex

But that does not mean there is a better rate elsewhere.

Why can you not answer the questions being asked?

What is the followon rate for the No1 loan that has just finished it's fix?

Untill you actualy say what the mortgage is you have now how can anyone tell you what might be a better deal?

Exemplar

Well...

Rather than going into all of this 'you are an !!!! for not answering the question' stuff I am going to ring them tomorrow.

Let you all know what happens..

Alex

HappyMJ

If you took out the mortgage 3 years ago you will revert to BMR which is currently 2.5% a very good rate. If you switch to another mortgage with Nationwide now at the end of this deal you will revert to SMR which is currently 3.99%. They will not tell you clearly that this will happen. It will be in the paperwork correctly displayed but it won't be highlighted to you.

If you did switch to another deal then the 5 year rate is 5.49% but you lose benefits such as asking for payment holidays and a borrow back facility.

I highly recommend you think about the real costs of switching as it will cost you a lot more. The 2 years paying 5.99% rather than 5.49% will only cost £1,650 more but leaving the mortgage as you say will cost £1,800 to leave and then an additional £2,500 every year after that due to SMR being higher than BMR.

getmore4less

alcot33uk wrote: »

Well...

Rather than going into all of this 'you are an !!!! for not answering the question' stuff I am going to ring them tomorrow.

Let you all know what happens..

Alex

If that "them"is Nationwide then they cannot tell you what you need to know.

THey are not your friend.

If fact as has been said they will most likely lead you to a new product to get you paying more or hint you should leave.