on Nationwide base rate, should we come off and fix?

quietheart

We owe 67K currently with 14 yrs left.
Would you switch from Nationwide base rate to fixed rate?

BoGoF

What is the base rate?

quietheart

sorry we're paying 2.5%

originalmiscellany

afford an overpayment at all?
Will you take all 14 years to pay off your mortgage?
Can you afford it if interest rates go up to 6%?

theduke2011

You need to consider what is more important to you - having the stability of a fixed rate/or taking advantage of the rate you are on (2.5% is low).
However, if you feel you need stability you could look to switch on to a fixed rate mortgage (not only with nationwide - there are plenty of other lenders out there offering great fixed rate deals).
Bare in mind though that fixed rates across the market have been slowly increasing over the past few months, so if you want to fix it may be worth securing a deal sooner rather than later.
Hope this helps.

Regards,
D

TrickyDicky101

Can you currently afford to make overpayments over and above your regular mortgage repayment? If so, by how much? I am in an almost identical position as you (14 years remaining on o/s balance of £94k) and I have chosen not to fix. I comfortably overpay each month so any rises in base rates will not impact the overall value of payments I make to the Nationwide each month.

getmore4less

Can you currently afford to make overpayments over and above your regular mortgage repayment?

This gets asked a lot but anyone considering a fix at a higher must be able to overpay.

If they cant afford overpayment how can they afford the fix when the rates are higher?

What needs explaining, so a borrower can make an informed choices, is given two mortgages, the current deal and the alternative then paying the same monthly payment what the potential outcomes could be for various rate senarioes.

The effect of overpayment on a lower rate has a significant impact on future debt and ultimately the overall cost.

The longer the tracker is below the potential fixed rate the higher the tracker rate has to go before you are worse off and it can be a quite a bit higher than the fix.

eg
1. £67k mortgage 14y term @ 2.5% £473pm

2. alternative 2y fix 3.89% £99 fees £519pm

So doing the like for like over 2 years say the rates stay low for 1 year then jumps whats the rate at which you become worse off.

After 2 years @ £519pm the fix on £67099 becomes £59,587.04

paying £519 on the tracker after 1 year becomes £62,394.47

for that to become the same as the fix over the next year the rate can go up to

5.59% well over the 3.89% of the fix.

Overpayments are the way to go

now a 2 year fix is usualy not a good idea but the same principle aplies to the longer fixes which have higher starting rates and so the overpayments are even bigger to start with

REMEMBER ALSO that once you drop this 2.5% you don't get it back, Nationwide follow on rate is now 3.99%

quietheart

Thanks for your advice. I'm twitchy about interest rates going up significantly. We'd survive but it would be very tight.
We have been making overpayments on and off but need to make it more regular because if the money is there we'll spend it, will have to start overpaying as soon as the salary hits the bank then we'll budget more efficiently.
I don't want to rush into losing this cheap rate so will stay on this and see how much we can overpay until things are clearer.
Thanks again.

quietheart

Can I ask a daft question pls -
The 67K outstanding is in 2 separate nationwide accounts
21K ending Aug 2025
46K ending Nov 2024

Does it make any difference which one I overpay on?:o

kazd

It makes no difference whatsoever although if you split the overpayments you will have credit sitting on your accounts if you should need to take a break from payments.

Make sure you are making the allowed overpayments, you don't want to be hit by an early repayment charge.

quietheart

kazd wrote: »

It makes no difference whatsoever although if you split the overpayments you will have credit sitting on your accounts if you should need to take a break from payments.

Make sure you are making the allowed overpayments, you don't want to be hit by an early repayment charge.

I didn't think it would make a difference but wanted to check!
And overpayments are allowed but it won't reduce the term unless i pay over £500.
So would I be better off saving to make payments of £500+ to also reduce the term or just overpaying as and when i can?
Cheers