Nationwide - BMR or a Fixed Rate deal?

philhew

My 5 year fixed rate (5.18%) mortgage with the Nationwide is coming to an end this month and I need help to make a decision whether to revert to their Base Mortgage Rate which currently stands at 2.5% or take up their offer on a Fixed Rate deal!

Their fixed rate offer which suits me is a 2 year Fixed at 3.69% with a £400 cash back incentive!

Can't decide whether to revert to the Base Rate or take up the offer of a Fixed Rate, if I went on the Fixed Rate, compared to what I have been paying monthly, I would be saving £62 a month on the 2 Year Deal or £110 month on the BMR.

Help.....I can't decide!

Any advice would be appreciated.

Cheers

getmore4less

Look at the followon rate for the fixed!

Do you want to give up base + 2%?

[Deleted User]

There's no right or wrong answer, but you would definitely be insane to go for the fixed.

Radiantsoul

The follow on rate after a fix is going to be much higher than your current follow on rate. Hence why they are happy to give you £400.

I would say that if you are going to fix it probably needs to be for more than two years, as it seems unlikely interest rates will rise by much over that timescale. I would regard the current follow on rate as a once in a lifetime opportunity to pay down your mortgage quickly.

AMILLIONDOLLARS

philhew wrote: »

My 5 year fixed rate (5.18%) mortgage with the Nationwide is coming to an end this month and I need help to make a decision whether to revert to their Base Mortgage Rate which currently stands at 2.5% or take up their offer on a Fixed Rate deal!

Their fixed rate offer which suits me is a 2 year Fixed at 3.69% with a £400 cash back incentive!

Can't decide whether to revert to the Base Rate or take up the offer of a Fixed Rate, if I went on the Fixed Rate, compared to what I have been paying monthly, I would be saving £62 a month on the 2 Year Deal or £110 month on the BMR.

Help.....I can't decide!

Any advice would be appreciated.

Cheers

A no brainer I would have thought, even with the cash back divided over 24 months you are better off on BMR!

AMD

PeteM1967

I was offered that £400 bribe when my NW tracker expired last year. Naturally I decided not to take them up on their kind offer - however I did take a look at the small print concerning the £400 cashback:

- It is also available (or was) to people switching from the BMR, just they don't advertise that so clearly for obvious reasons. Hence you don't necessarily loose out by not taking it now. You might want to read the leaflet thoroughly to confirm this is still the case.

- The offer can be withdrawn at any time. Hence don't rely on it still being available when you finally get round to fixing.

In my situation I was finishing a +0.74% tracker unfortunately collared so 2.74% in practise. It was a case of going to 2.5% with the expectations that base rates would remain unchanged until the end of this year or going for a more expensive fix. Additionally I would have been loosing a large overpayment reserve by fixing. All of this made it a bit of a no brainer and I will hence be making the most of the 2.5% BMR for as long as it lasts!

lizardbouy

I'm one of the (lucky) people about to drop off my fix onto the Nationwide BMR. I've been looking around for five years fixes and weighing up whether to move or not but the more I think about it the more it looks like I've effectively got a lifetime tracker at +2.0% with the Nationwide BMR and no exit fee.

This make sense? Am I reading this right?

If so then I might as well stay where I am, no better trackers out there really and can't imagine a fix saving me money in comparison during the coming years of rises. And if in 2014/15 they are I can switch.

Of course, assumes Nationwide honours the BMR.....

Radionotme

They've honoured the BMR so far, what makes you think they can/will change it?
I'm also looking forward to dropping onto it - in two stages, one in July, one in October. With interest rates currently forecast to stay at 0.5% for three years it seems a no-brainer to stay on it.

Plus, as someone else mentioned, you lose the borrow-back facility if you switch to a different deal, and I've been making as much use as I can of the overpayments for the last couple of years.

moneytalk_2

I was on the 5.18% fixed (5 years) until last December with Nationwide. I am now on the BMR rate and carried on paying the same amount as I did in the last five years, so I am now overpaying by £145 a month. As mentioned by others that if you fixed you will loose the option of borrowing back from any overpayments reserves.