Cost of Increasing My Nationwide Mortgage?

Nickyg

Hey Guys,

I currently owe 150k on my Nationwide mortgage fixed at 4.59% until Jan 08. I am purchasing a new house and require an additional 100k on the mortgage at 5.18% starting in June. It appears the only options I have are to a) start the new section of the mortgage in June, paying the setup fee, then renew the 150k portion in Jan paying another setup fee and this pattern would continue as I would basically have 2 seperate mortgages, renewing one or other every year because they would never sync up, OR b) I can pay an early repayment charge of roughly £1000 on the 150k and start a brand new one for the whole 250k amount, still with the Nationwide.

The second option is easier as it means one mortgage to manage. However my question is, is it really fair that I have to pay £1000 to get out of my exisiting deal when all I am doing is taking out an even bigger mortgage with the Nationwide at a higher rate of interest than I am currently on! Doesn't seem right. I could understand it if I was moving to another lender.

Any advice for potentially getting this back would be great!

Many Thanks

Mr_helpful

Take your top up on a no redemption mortgage. it will be a higher rate but should have little ot no set up cost and then when fixed rate comes to an end renegotiate or remortgage the whole lot.

Nickyg

Thanks for that, I'll run it by my advisor and see what he reckons.

Devon_Sheepie

Nickyg wrote: »

Hey Guys,

I currently owe 150k on my Nationwide mortgage fixed at 4.59% until Jan 08. I am purchasing a new house and require an additional 100k on the mortgage at 5.18% starting in June. It appears the only options I have are to a) start the new section of the mortgage in June, paying the setup fee, then renew the 150k portion in Jan paying another setup fee and this pattern would continue as I would basically have 2 seperate mortgages, renewing one or other every year because they would never sync up, OR b) I can pay an early repayment charge of roughly £1000 on the 150k and start a brand new one for the whole 250k amount, still with the Nationwide.

The second option is easier as it means one mortgage to manage. However my question is, is it really fair that I have to pay £1000 to get out of my exisiting deal when all I am doing is taking out an even bigger mortgage with the Nationwide at a higher rate of interest than I am currently on! Doesn't seem right. I could understand it if I was moving to another lender.

Any advice for potentially getting this back would be great!

Many Thanks

My comment as a current Nationwide customer would be to take out an additional £100k mortgage to run side by side with the £150k one. It would seem silly to pay out an early redemption fee AND end up with a higher interest rate just to have a single mortgage account. even if you have to pay a setup fee of £199, got to be better then £1000 early redemption and the 0.59% lower rate you keep will go towards covering the £199 more then adequately, I would have thought.

In my case, I have three Nationwide mortgages all running on the same property - A primary one, then another one when I moved to a more expensive property and then another small 'top-up' type to pay for home improvements. I had it like this for about 7 years until I sold the house and for about 2 months had no mortgage, but when I completed the sale on my current house, Nationwide decided that it would be simpler to just reinstate all three instead of making them into one. I made the mortgage length the same on both so make life a little easier - there is nothing to stop you taking out the £150K mortgage and saying you want it to run for say 21 years 6 months to complete at same time as first one.

Also, they only charged one setup fee - and a new feature for existing Nationwide customers is that they refund that (too late for me, but you may benefit? check their website).
Also a side benefit is that if you have a mortgage product that you can do overpayments on, you would be able to do this on both the £100k and £150k should you be in a position to do so.

Hope this may help - based on ease of use mostly, rather then squeezing the last penny saving necessarily.

DS.