mortgage advice - stick or swap?

lesalanos

I am in the process of moving to a new house. Had an offer for mine and an offer accepted on a house to move to.

Looking to borrow approx 150 against a purchase price of 200 so just inside 75% LTV.

Have an agreement in principle with our current lender - Nationwide but I am now tempted by some other lenders out there. Looking at possible Chelsea, britannia (co op) or leek united.

Would I be better going for a longer term fixed rate (5 yrs) or 2 yr?

By applying for others would it jeapordise the agreement with NW?

Thanks for any advice

lee111s

An AIP is just to say they initially agreed to lend you the money if you go for a full application based on your credit check and income but it is subject to underwriting.

The 5yr vs 2yr fix is only something you can answer. Are you happy paying the rate of the 5 yr for 5 yrs? If you go for the 2 yr and remortgage in 2yrs time, there's likely to be fees involved so these need to be taken into consideration too.

What rate have NW offered?

lesalanos

Thanks Lee,

I understand about the AIP, I was concerned more that if I apply to one of the other lenders but they turned me down then it would affect my credit score if I went back to NW.

I do not have the full details with me of the NW offer, from memory it was a tracker 2.59% above the base rase for 5 years.

kingstreet

How long have you been with Nationwide?

What is the "follow-on" rate for your current mortgage deal?

lesalanos

The follow on rate after the 5 years will be 3.99%.

Have been with Nationwide on the current mortgage for 8 years.

Current mortgage remaining approx 58k, rate at present is (from memory) approx 1.59% above base

thanks in advance for any other advice

kingstreet

Did you make a change, so you lost the 2.5% BMR?

lesalanos

Sorry for disappearing yesterday .. got called in to work

Just had a quick look and I think that I am paying 2.34% which from memory is 0.34% above base, capped at 2% minimium by NW.

No changes have been made since taking out the mortgage 8 years ago.

thanks in advance again

kingstreet

So, why aren't you looking to port the current rate to the first part of your new mortgage with Nationwide, taking one of their current new products on the remainder?

If this isn't a lifetime tracker-type product, at some point your product will revert to BMR, the Nationwide's BoE + 2% capped rate which applies to borrowers who took out their mortgage before April 2009.

Why do you think the follow-on rate is 3.99%? That's for post 4/09 mortgages.

Chances are, this will be lower than you get by going elsewhere...

lesalanos

Thanks for that Kingstreet, much appreciated.

Had read a little about porting so will ring up and find out if I can do this.

Thanks again