Remortgage - Long term fixed rate advice

Brocher_2

Hi,
My current mortgage offer(fixed rate tracker) with Nationwide is coming to an end (31.12.06).

I'm tempted to go with the Nationwide 10year fixed rate @ 5.18% with an arrangement fee of £399.

Mortgage amount:
£29394 repayment
£25000 Interest only
19year 8 months to go

10year fixed @ 5.18% = £306.75 (also paying £200/month overpayments to reduce the term)

Would this be the way to go, or are there better deals out there I should be looking at??

Thanks in advance

UK007BullDog

I would go 5 year fixed max. Nobody knows what will happen in the next 10 years. There might be better deals out there in the future.

Having said that if you know you are going to stay living there for the next 10 years and you want to overpay you might even be able to clear a big lot by raising the overpayments every years as and when you get a payrise.

In the end only you can make a decision.

Rick62

If you do want 10 years Woolwich have a Fixed at 4.98% with £595 fee.

The rate on either is pretty good, it is a long commitment however, so you need to be sure otherwise you could be facing Early Repayment Penalties if you need to change the mortgage.

MortgageMamma

What makes you want the 10 year fixed? security? do you not have long left to pay off your mrotgage and just want to remortgage the once?

You might be better looking for a fixed which does not have ERC's within the fixed period - I think there are a few about off the top of my head - rather big arrangement fee/s

There are some 15 20 and 25 year fixes about also

Brocher_2

Just playing about with the Nationwide calculator.

If I were to go for the 10 year fixed rate offer from nationwide & change from part repayment/part interest only(keep the endowment as a savings plan) I could be looking at this:

Mortgage amount:
£54394 repayment
19year 8 months to go

10year fixed @ 5.18% = £367.94

If I change the term length from 19yrs 8months to 10yrs only, the monthly figure rises to £581.73.
As I am currently paying an additional overpayment of £200 every month anyway, if I were to take up the offer with the term length remaining as 19yrs 8months & pay the £200/month overpayments I could effectively pay off my mortgage in 10years woohoo!!!!
If my circumstances were to change I could allways reduce/stop my overpayments.

Am I correct or have I missed something, would love to clear the mortgage by then???


PS. as UK007BullDog mentioned, I'm not planning on moving in the next 10 years

Brocher_2

Would I be better to go for the 5 year fixed rate & see what on offer in 5 years time(have an additional reservation fee to pay for)?


Please help, hoping to get this sorted this week, before the rate rise!!!

Mrs_Optimist

We fixed our mortgage for 5 years with Nationwide and this comes to an end in April. We have been paying way over the odds on this mortgage 5.74% for the majority of the 5 years and as a result will not opt to fix again. We are luck in that we have a smallish mortgage compared to most and will now be opting with the Woolwich tracker which is 0.19 above the BofE base rate for the life of the mortgage with no arrangements fees and no early repayment/redemption penalties. This will also enable us to overpay as much as we like without penalties. To put it into perspective, we are borrowing more money but our monthly payments will be exactly the same, the interest rate is likely to go up again but over 5 years I am pretty sure they will drop also. If you do opt for fixed rate, be sure to choose wisely, we wish we had.

tiff

We are on a fixed rate of 4.89% for 15 years with Northern Rock and we can overpay as much as we like as long as we leave £1 outstanding. I think thats a good deal, we took this out a year ago.