Stay with Nationwide BMR mortgage or move to fixed?

brit1234

The markets have factored in a 0.75% increase this year. There are likely to be rises after that returning to a more normal level. However I can't see the BOE increasing rates fast, scattered 0.25% increases over the next few years.

Desperado99

We are also on Nationwide's BMR, and are planning on staying with it for the foreseable future. It is worth bearing in mind that once you move from the BMR (for a fixed rate etc) once the new deal ends you won't return to it once your new deal ends (as it's now the Standard Mortgage Rate which is higher).

We are overpaying, as our fixed rate was 5.69% and have continued to pay the same amount.

swingofthings

Sight error in the OP - the fix rate for 5 years is 4.69% for no fee and 4.49% with a £999 fee ... the OP says it was 3.99% with a £999 fee.

I am actually on the BMR too and if I had seen a five year fix at 3.99% i would have probably taken it now!

Gorgeous_George

swingofthings wrote: »

Sight error in the OP - the fix rate for 5 years is 4.69% for no fee and 4.49% with a £999 fee ... the OP says it was 3.99% with a £999 fee.

That makes a big difference. Using the original figures there was little to choose between the two options but paying the fee was marginally advantageous. With the revised figures, do not pay the £999 fee.

I'd stick with the BMR but it all depends on how highly you value the security of fixed rate.

I probably wouldn't overpay either. I'd use regular savers (first direct pay 8% gross for example) and ISAs etc., to earn more than 2.5% net.

GG

Wickedkitten

Bunting wrote: »

We are also on Nationwide's BMR, and are planning on staying with it for the foreseable future. It is worth bearing in mind that once you move from the BMR (for a fixed rate etc) once the new deal ends you won't return to it once your new deal ends (as it's now the Standard Mortgage Rate which is higher).

We are overpaying, as our fixed rate was 5.69% and have continued to pay the same amount.

Aye, this is what we are planning on doing as well, dropping to the BMR, but still paying the same as we usually do. Makes sense really seeing as how that amount of money is already budgeted for.

swingofthings

Actually in my case, it would be worth paying the fee - as i have a 170k mortgage, then over 5 years, I would save around 700 quid if i pay the product fee (upfront).

However, not ready to take the plunge on the fixed yet - still enjoying the 2.5% too much.

Incidentally I agree with GG, don't overpay for the sake of over-paying. I have a tracker ISA which is paying above 2.5% so it's better putting the money in there rather then overpaying. I appreaciate it is more effort to ensure that the savings are over your mortgage rate but it will pay dividends in the long run.

aeromint

We are also went on Nationwide BMR, when our fixed rate mortgage came to an end. What I do is instead of overpaying each month (which I used to do), I save until I have a lump sum of over £500, and then pay it to N/wide. Our monthly payment then reduces automatically. I remember that I had to instruct N/wide to do this, & did this via the internet.

swingofthings

why save up £500 ? If you are on the BMR, you can overpay as much as you like and get no charges. Remember your interest is calculated daily, so your overpayment will still reduce your balance immediately. You'll start to be charged less interest, but your monthly payment won't reflect this straight away. Essentially I owe around £360 a month but I pay in £500 a month. This means I overpay by £150 a month. The balance is reduced straightaway but i still pay £500 a month. I am on interest-only but the same must be true for repayment.

Mozette

Meeper wrote: »

I would stay on the BMR but make payments as if I was on a 5% rate.

Cracking advice! If you can afford to do this, do it.

I'm on Nationwides BMR and wild horses wouldn't drag me off it. I took the decision to get some necessary improvements done to my home rather than overpay, because I do have some leeway if the mortgage rate rises.

IMO you'd be hard pushed to do better, which is why they no longer have the BMR but an SVR. If it wasn't to your advantage, it would still be available!

Desperado99

swingofthings wrote: »

Actually in my case, it would be worth paying the fee - as i have a 170k mortgage, then over 5 years, I would save around 700 quid if i pay the product fee (upfront).

However, not ready to take the plunge on the fixed yet - still enjoying the 2.5% too much.

Incidentally I agree with GG, don't overpay for the sake of over-paying. I have a tracker ISA which is paying above 2.5% so it's better putting the money in there rather then overpaying. I appreaciate it is more effort to ensure that the savings are over your mortgage rate but it will pay dividends in the long run.

I agree, with a larger mortgage, it can be worth paying the fee. Our mortgage is currently £50K so for us it's not worth it.

We have savings on top of overpaying, which with a bit of effort are paying above 2.5%.