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

kazd

When you overpay £500 + they recalculate your payment rather than reduce your term, so you could find your payment could go down, if paying by dd it will take the reduced amount. I believe though you can speak to direct and get your dd fixed.

When you overpay on your account it just sits there and when the advisor looks at your account it just looks like a credit and you can draw on this money if you wish. If you want your term to go down you would have to ask them to apply the credit to your balance. I think once this action takes place then you wouldn't be able to drawdown as your account would no longer show as sitting in credit.

Joe_Bloggs

You can view your Nationwide mortgage on line. You can choose on line how they treat overpayments in the overpayments preferences section.

Overpayments go into an overpayment reserve. I used to overpay what little I could whenever I could. This was with money that had no better immediate or near future use and would have gone into long term savings accounts.

It is important to build up savings so that you do not have to borrow money at extortionate interest rates when emergency situations occur.

Overpayments are not for those who have debts at an interest rate higher than the mortgage. If you can get a higher net interest rate from savings than the mortgage rate then why bother with overpayments ?

J_B.

quietheart

Our mortgage is all the debt we have.
We have about 4 months salary saved. My husband's job is as safe as it can be and would acquire a reasonable redundancy if it came to it so I feel that is adequate for now.
I'd just like to see the debt going down I guess.

Joe_Bloggs

It is annoying when the biggest debt of your life appears to be subject to the whims and fancies of the financial world.

If you have built overpayments into your budget then you can 'absorb' the shock of an interest rate rise, should it occur by, overpaying less.
By having savings you can benefit from interest rate rises by moving them around to get the best rates.

Simplifying things, the total affect of an interest rate rise will be on the extra you have to pay on your mortgage minus the extra you get back on your savings.

You can't afford to be complacent with savings rates ! Savings institutions count on consumer amnesia and lethargy.

I hope to have the same amount in savings as my mortgage in three years. Until then I hope I can maintain my overpayments ,my savings and my job.
J_B.

originator

Wish to god I was on nationwide BMR right now,as it is I am paying 5.78% til august 2012,overpaying as much as my income allows.By 2012 it's probably gonna have gone sky high!

kazd

originator wrote: »

Wish to god I was on nationwide BMR right now,as it is I am paying 5.78% til august 2012,overpaying as much as my income allows.By 2012 it's probably gonna have gone sky high!

I was on 5.89% 5 year fix until Oct 2012 but I paid to come off it, the cost to me was £5k just under. If I stayed on the fixed rate my mortgage at the end of the fix in oct 2012 would be £93k, I hit £93k a couple of months ago and had paid off the £5k it cost to switch as well. Sometime you just have to take that chance. I have continued to pay the same amount every month just more of it now goes to paying off the capital. At the point of switch I had just under 4 years left on the fix.
.
Forgot to say I switched to First Direct tracker, 1.89% above base rate

Gorgeous_George

kazd wrote: »

Forgot to say I switched to First Direct tracker, 1.89% above base rate

Well done you.

Nationwide's BMR is equivalent to a 2% base rate tracker and could be even better (it is limited to 2% above base rate but could be less). I wouldn't switch based on my own guess of where base rates will go (or will not go).

I'd never fix for two years.

GG

kazd

Gorgeous_George wrote: »

Well done you.

Nationwide's BMR is equivalent to a 2% base rate tracker and could be even better (it is limited to 2% above base rate but could be less). I wouldn't switch based on my own guess of where base rates will go (or will not go).

I'd never fix for two years.

GG

I have to say I have always fixed but I was gutted when the rates started dropping and we were fixed so high, I took a gamble and I knew it was a gamble but luckily for us it has paid off so far.

Radionotme

What were the conditions on that tracker? I considered coming off, but we were on 80+% LTV so wouldn't have qualified for most decent deals.
Now down to just over 71% LTV through overpaying, so I'll be better placed in future, although to be honest I can't see me coming off the Nationwide BMR for while (when I do eventually get onto it that is!)