nationwide ERC free

gocro

Received a letter from th Nationwide today informing us that our fixed rate deal ends in March and that we should elect to sign up online for 'free' money (£400) or thay would put us on their Base Rate Mortgage by default. The letter continues, saying that the BMR attracts no ERCs for overpayments or early repayments.
We were planning to pay our mortgage off in February with a penalty of £1400 pounds. Can it be true that
A: we do nothing and pay it all back in March it will attract no ERC
B; we change online to the new product, collect £400 then pay it all off and still avoid the penalty.
Or is it all just wishfull thinking?

Thrugelmir

Why do you want to pay off your mortgage in February if the fixed term ends in March?

gocro

The 3 year fixed deal term ends march april we owe £50K and eight years to completion.

BoGoF

gocro wrote: »

The 3 year fixed deal term ends march april we owe £50K and eight years to completion.

That doesn't explain why you want to throw £1400 away by intending to pay it of a month before the ERC ends?

gocro

The erc applies to our current deal. What I am labouring to ask is, should we wait until the new deal cuts in and avoid the erc or is this an illusion.

BoGoF

Of course you should, why pay it off a month early and pay £1400 for the privilege?

Joe_Bloggs

I am on the Nationwide BMR rate (2.5% at present). I think it makes sense to keep the mortgage running and each fill up individual cash ISAs, £5340 each for this tax year and £5,640 each for the next. I can get 4.4% tax free. That's £966 per annum between you.
J_B.

Thrugelmir

Joe_Bloggs wrote: »

I can get 4.4% tax free.
J_B.

Is that a 5 year fix though?

Joe_Bloggs

It was the Halifax 5 year fix I was referring to. This is a great rate if you have other money at shorter maturities and some available for instant access as a last resort.
J_B.