We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Is it a good deal and how do I work it out?
Cottage_Economy
Posts: 1,227 Forumite
Hubby and I are on a repayment mortgage with Nationwide with a variable rate of 2% over base (so currently 2.5%).
We have a mortgage of around £73,500 on a house worth around £190,000.
We've been looking at the recent deals coming out for people with good LTV rates, particularly Nationwide who are dropping their fixed deals quite low for existing customers. I think there's one 2-year fixed deal for 1.84% and fees of £900, and a 3 year fixed rate of 2.19% with a £900 fee. However when the deal ends we would go straight onto a Standard Mortgage Rate of 3.99%, which is almost 1.5% higher than what we currently have.
I realise there is no guarantee that interest rates, and therefore our mortgage rate, won't rise before the end of both of the 2 and 3 year fixed deals, but I just can't shake the feeling that either of these deals are going to cost me more money over the lifetime of the mortgage and they're not such a great deal. Especially when you take the fees into consideration and the fact I then have to run around and apply for another deal in 2 or 3 years time to avoid going onto the higher SMR
Can anyone help me work out whether I'm better just staying put and plugging away with the mortgage I have?
I should add as I have a mortgage from pre-2010 with the Nationwide I currently have the option of a payment holiday and borrow back facility. I may lose these once I switch to a new deal.
We have a mortgage of around £73,500 on a house worth around £190,000.
We've been looking at the recent deals coming out for people with good LTV rates, particularly Nationwide who are dropping their fixed deals quite low for existing customers. I think there's one 2-year fixed deal for 1.84% and fees of £900, and a 3 year fixed rate of 2.19% with a £900 fee. However when the deal ends we would go straight onto a Standard Mortgage Rate of 3.99%, which is almost 1.5% higher than what we currently have.
I realise there is no guarantee that interest rates, and therefore our mortgage rate, won't rise before the end of both of the 2 and 3 year fixed deals, but I just can't shake the feeling that either of these deals are going to cost me more money over the lifetime of the mortgage and they're not such a great deal. Especially when you take the fees into consideration and the fact I then have to run around and apply for another deal in 2 or 3 years time to avoid going onto the higher SMR
Can anyone help me work out whether I'm better just staying put and plugging away with the mortgage I have?
I should add as I have a mortgage from pre-2010 with the Nationwide I currently have the option of a payment holiday and borrow back facility. I may lose these once I switch to a new deal.
0
Comments
-
Unless your particularly want the fix the maths don't work.
On the two year deal the fee makes your equivalent rate 2.45% over the two years.
The 3 year deal works out at 2.60% over the 3 years.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Unless your particularly want the fix the maths don't work.
On the two year deal the fee makes your equivalent rate 2.45% over the two years.
The 3 year deal works out at 2.60% over the 3 years.
Thanks amnblog. Once you take account of that and the rise from BMR to SMR it looks even worse.
I think I'll stick with what I have and see if I can rework my budget to find a bit more money to overpay every month.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.3K Banking & Borrowing
- 254.4K Reduce Debt & Boost Income
- 455.3K Spending & Discounts
- 247.2K Work, Benefits & Business
- 603.9K Mortgages, Homes & Bills
- 178.4K Life & Family
- 261.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards