Mortgage deal ending, but good Standard Variable Rate

delmar39

Hi there

My fixed rate deal at 4.69 is coming to an end in May. As it was a 5 year fix, we revert to the SVR currently 2.5%.

There are some good fixed rate deals out there at the moment offering £300 cashback in some cases.

However, I'm reluctant to give up the SVR. If I take out a new product I'll be tied into the expensive Base Rate Mortage when the deal ends.

Effectively I see the the SVR as a fairly cheap tracker and it would have to rise quite a bit to compete with some current fixed rate deals.

Is anyone else in this position? Any advice?

Thanks.

Wh05apk

Agree with you, you have a decent rate, keep looking rates may improve later in the year, you may feel comfortable jumping then.

delmar39

Wh05apk wrote: »

Agree with you, you have a decent rate, keep looking rates may improve later in the year, you may feel comfortable jumping then.

Thanks for taking the time to respond. I'm very reluctant to give up the SVR the £300 cashback appeals, but at 2.5% rates would have to shoot up quickly for me to lose out (currently on 4.69%). Fix wise there are deals (with Nationwide my current provider) at around 3.89% so I could fix at a reasonable rate with cashback. However, we go full circle - this product means reverting back to the Base Rate Mortgage currently 3.99% so quite high.

I'll sweat it out and see what happens. Hoping to make some savings at first for sure, at least until interest rates rise.

Wh05apk

Unless your mortgage is minimal then the cashback really should be irrelevant.

Given the fixed is almost 1.5% higher (assume its a 2 year deal?) rates will have to average 1.5% higher over the two years, assuming they go up in a straightline, they will need to be 3% higher @ 3 1/2% in two years time for you to benefit (assuming no fees) personally cant see it.

gooner265

I am in a similar position , my fixed rate of 5.99 % with the Nationwaide has come to an end , I have been offered a fixed rate of 4.19% with Coventry over 4 years which seems a good deal to me or am I better staying on the variable?

Wh05apk

That looks good to me, about the same as many svrs now.

dimbo61

If you both stay on the 2.5% SVR then put the savings compared to your current payment into cash ISA,s paying 3% or more don't waste the money

bully1234

I'm on a SVR with Nationwide - it's been 2 yrs now and saving £1700 in ISA and bought furniture etc for the house. I'm not going to fix at the moment.

delmar39

dimbo61 wrote: »

If you both stay on the 2.5% SVR then put the savings compared to your current payment into cash ISA,s paying 3% or more don't waste the money

Thanks dimbo. I'm going to continue paying the same amount off my mortgage as if I still had the 4.69 deal. This way I overpay quite a bit whilst absorbing any interest rate rises and not relying on the 2.5% new monthly payment. You're quite right though, it would be so easy to blow the savings on other things. I'm tempted!

I have another Nationwide product form when we borrowed more to buy our new house. There is £27k outstanding on this at 3.99%. We're a year into the two year deal. I'm going to use the savings from my other deal to overpay this product - according to the mortgage overpayment calc I can shift the £27k debt pretty quickly by overpaying quite a bit each month. As this product shifts to the Base Rate Mortgage in a years time (currently at 3.99%) it's well worth targetting this product with overpayments. Any increases in interest rates this year mean that I could end up on quite an expensive rate, so the more I pay off this product from March onwards the better.

Sounds like a plan?!

delmar39

bully1234 wrote: »

I'm on a SVR with Nationwide - it's been 2 yrs now and saving £1700 in ISA and bought furniture etc for the house. I'm not going to fix at the moment.

I guess your SVR came at just the right time. Our deal ends in May, just as interest rates are predicted to rise. Typical! However, still a good deal as things stand.

Burridge60

Please go on paying what you were on the fixed rate as rates are due to go up and we only have a few weeks left before the BoE meet again!