Fixed Rate ends Sept- what deal now?

Karma4All

davidscot wrote: »

Now if I used the excess money left to overpay then it would reduce the term of mortgage.

Or you put the excess money somewhere that nets > 2.5%

davidscot

Karma4All wrote: »

Or you put the excess money somewhere that nets > 2.5%

It would have to be an account that I would not be able to access as the temptation would always be there to dip into it;)

AMILLIONDOLLARS

davidscot wrote: »

It would have to be an account that I would not be able to access as the temptation would always be there to dip into it;)

Me too:o, so Iwill do a tranfer each month into the mortgage account.

AMD

davidscot

So that seems to be the general agreement then, stick with the base rate +2% deal at end of mortgage and use any extra to overpay:j

soozonholiday

Thanks for everyone's input on this thread. I am in a similar position where my Nationwide 5 year fixed ends Sept 2011. I was feeling a bit lost as it seemed to me that letting my mortgage end automatically and shift to the BMR at 2.5% seemed too good to be true after paying 5.18% for last 5 years.

Just to note from Nationwide:
Any mortgage products reserved on or before 29th April 2009 will revert to the Base Mortgage Rate (BMR). If you choose to switch to a new Nationwide mortgage product, the new product will currently revert onto our Standard Mortgage Rate (SMR).

BMR 2.50% current rate
Upper limit or cap: Guaranteed not to be more than 2% above Bank of England base rate with unlimited overpayments

SMR 3.99% current rate
No capping guarantees but can make unlimited overpayments

I hope that based on this thread I am reading it correctly and the date of before 29th April 2009 refers to date original deal reserved i.e. 5 years ago in 2006. If I am mistaken then please let me know and I may look to fix if forced onto SMR at 3.99%. These things are tricky in my opinion!

Thanks again.

Thrugelmir

soozonholiday wrote: »

I hope that based on this thread I am reading it correctly and the date of before 29th April 2009 refers to date original deal reserved i.e. 5 years ago in 2006.

Yes you are correct. So suggest you take every advantage of the opportunity to overpay your mortgage. There's never going to be a chance like this ever again.

davidscot

Thrugelmir wrote: »

Yes you are correct. So suggest you take every advantage of the opportunity to overpay your mortgage. There's never going to be a chance like this ever again.

So let me clear things up hopefully here:o If I just let the deal end in Sept I move to base rate +2%- yes? So I can then overpay with any excess cash -yes? If rates suddenly rise I can then just move asap onto a tracker/fixed rate deal -yes?
Hopefully someone can clear this up for me here:D

Thrugelmir

davidscot wrote: »

So let me clear things up hopefully here:o If I just let the deal end in Sept I move to base rate +2%- yes? So I can then overpay with any excess cash -yes? If rates suddenly rise I can then just move asap onto a tracker/fixed rate deal -yes?
Hopefully someone can clear this up for me here:D

Why move? There are few tracker mortgages that guarantee base +2% or less for life. Which is what you'll ever with the NW if not in name but in terms of the product.

If you fix. Then you'll still end the fixed term moving onto a higher SVR rate than base plus 2%. So will need to pay further product fees for yet another mortgage.

By reducing the capital debt owed then you'll pay less interest monthly. Which in turn reduces the amount your mortgage repayments will increase by. So focussing on reducing your mortgage balance as quickly as possible. Then the rest will fall into place.

davidscot

Thrugelmir wrote: »

Why move? There are few tracker mortgages that guarantee base +2% or less for life. Which is what you'll ever with the NW if not in name but in terms of the product.

If you fix. Then you'll still end the fixed term moving onto a higher SVR rate than base plus 2%. So will need to pay further product fees for yet another mortgage.

By reducing the capital debt owed then you'll pay less interest monthly. Which in turn reduces the amount your mortgage repayments will increase by. So focussing on reducing your mortgage balance as quickly as possible. Then the rest will fall into place.

Got the first 2 points thanks. Could you explain the 3rd point a little more. If I stay where I am can I just make overpayments to reduce overall term of mortgage.
Just a bit confused here sorry

Thrugelmir

Lets say by the next time mortgage rates rise you have repaid £1,500 of additional capital off your mortgage.

As you are finishing a 5 year fix. I'm guessing that 20 years of your mortgage term remaining.

So if you owed a £100k a .5% rise in base rate (to 3%) would increase your monthly repayments to £554.60p

Owe £98,500 = monthly repayment of £546.28p.

Only £8 you might say. However overpay your mortgage by this amount as well, and the snowball you are rolling will grow and grow,