Fix now or move onto Nationwide Base Mortgage Rate

arun76

TrickyDicky101 wrote: »

Can I ask why you want to fix? Is it because you are very concerned that you couldn't absorb rises in interest rates easily? In your position I would stay on the BMR and adjust my payments so that I am overpaying by approx £150 pm in which case you would effectively be overpaying to the extent of shortening your term down to the 12 years. This would then give you a buffer cushion should interest rate rises so that you can leave your outgoings the same and simply make slightly lower overpayments each month.

I can absorb the rate rises, but as interest are likely to increase in the next the interest rate only needs to increase by 1.5% to 2% for the BMR deal to be equivalent to the fixed rate i can get now. As its not a large difference i am just going back on forth on whether fixing is a better option.
I know the advantages of the BMR are the flexibility for no limit on over payments but at the same time i dont want to be paying more than 4% in a year or two when interest rates pass the 2% mark....

Thrugelmir

arun76 wrote: »

but as interest are likely to increase in the next the interest rate only needs to increase by 1.5% to 2% for the BMR deal to be equivalent to the fixed rate i can get now.

Then in 2 years time you still have the same quandry.

Except that you are guaranteed to move onto SMR of 3.99%. Unlike the BMR there is no upper limit or cap.

I would reiterate that rates of base plus 2% will be the exception in the mortgage market of the future.

rachbc

I'm in the same position and have decided to move onto the BMR for reasons given above - yes rates might go up over the 2 years to the point where the BMR is higher than the current fix, but at the end of that deal I would be looking at moving onto the SMR of goodness only knows what by then. Don't know about you but the are bomarding me with cashback deals to move off the BMR which mkaes me feel I shoudl probably hold onto it!

magpiecottage

It is worth bearing in mind that Nationwide does not offer the BMR any more, as others have said. There is a reason for that - it is not sufficiently profitable (if it is profitable at all).

The SMR does make a profit.

Whoever is putting up the money for the fixed rate is doing so in the expectation that it will be more profitable for them to do so - i.e. they think it will produce more for them than the SMR (not the BMR).

They may be wrong but I suspect they more about the probability of it happening that you or I do.

So they are trying to get you to gamble one way by playing on your fear to their advantage.

On that basis, I think that you would probably be better off on the SMR than a fix and the BMR will be even more advantageous.

arun76

rachbc wrote: »

I'm in the same position and have decided to move onto the BMR for reasons given above - yes rates might go up over the 2 years to the point where the BMR is higher than the current fix, but at the end of that deal I would be looking at moving onto the SMR of goodness only knows what by then. Don't know about you but the are bomarding me with cashback deals to move off the BMR which mkaes me feel I shoudl probably hold onto it!

Thanks for all the advice and i have now been convinced to stay on the BMR by the good people on this forum!

Cheers again..

ab7167

We've had exactly this dilemma and are staying on the BMR. Took a lot of agonising though... Also I don't know if you realised this but new Nationwide products do not allow you to withdraw overpayments, which older ones do - another good reason for staying on your current deal!