What am I missing? - Fixed rate coming to an end

Litotes

Hmmm, I am coming to the end of my fixed term with the Nationwide.

I have looked at what they are offering for the future.

I have a LTV of 40% and they are coming up with offers of between 2.84% and 3.99%.

Now as I have had my mortgage with them since 2007, I think I revert to their BMR (Base Mortgage Rate) which is guaranteed not to be more than 2% above Bank of England base rate - currently 2.5%.

Looking at the financial papers, most reckon we won't move base rate for a while, and anyway - it would have to go to 1.5% before I lost out.

Am I missing something?


Litotes

kingstreet

Possibly not. The only issue is if and when rates do start to rise, if you want a fix at that point the rate will probably be higher than it is now.

I'd stay on the 2.5% and overpay, so you owe less when rates do start to rise.

If you change to another product with Nationwide, you lose the base + 2% guarantee for ever.

opinions4u

You've sussed it out correctly.

You understand the risks.

Now you need to decide what to do!

Thrugelmir

You'll find it hard to find many products that'll offer under 2% above base in the mortgage market going forward.

As base rate eventually rises so will the cost of all borrowing. Any benefit of a short term fix will be outweighed by the onging SVR once the fixed term ends.

As your mortgage balance owed reduces the benefit of remortgaging will become more and more marginal.