Some remortgaging advice

gogsboy

I currently have a property that is not in use and looking to add some finishing touches to it with a view to either renting or selling it.

I made a mistake in taking a 5yr fixed rate in 2007 with Nationwide, seemed a good idea at the time and the rate was 5.44% :mad:

Have heard Nationwide are not keen to allow remortgaging and have banned some customers who do this, not sure if truth in that.

Anyway the mortgage is not massive at around 52k outstanding, it's interest only and I have an investment plan alongside it is you like.

What would be my best option here with rates being lower?

I had a statement that said there would be an early repayment charge of around £1600, not sure if a mortgage effectively gets paid off when remortgage and jump provider.

Any advice and pointers most welcome

Thanks :money:

Thrugelmir

The Nationwide cannot ban you from remortgaging. If you pay the ERC then you may choose to move elsewhere.

As you have a relatively low mortgage. Paying an ERC of £1,600 makes little sense in my mind.

Although you say you have an investment plan to repay the mortgage. Is this generating an after tax return of 5.5%? The money may be better spent in paying the mortgage instead.

When the fixed term ends you'll go onto the NW's BMR of base plus 2%. So is remortgaging a sensible option. As although the new fix rate may be cheaper the follow on rate will certainly be higher.

gogsboy

I stumbled across the article online but can't find it again, never read it all and anyway you cannot believe all you read online.

I was thinking the same with the ERC being that high it might not be worth it if selling but might be if was to rent?

Yearly interest is around 3k and could potentially be halfed if the right deal was out there, my other mortgage is only 2.1% but might be hard to pick up that just now?

I'm not 100% sure on the plan, it's doing ok I think but it's been up and down a bit, I've had it since 2002 but was not paying 5.5% on the mortgage up until 2007, I have also made quite a bit of overpayments over the years, I favoured this as opposed to repayment.

Good point on the follow on rate, maybe just best continue to pay and just leave it as is...anyone else have any views

Thanks