Nationwide Fixed Rate

starM

Hi,

I have been making overpayment of £500 on my Nationwide Fixed rate mortgage. The fixed ended - end of April and I made a lum sum payment of 6k. Currently on base rate 3.99%. I have received a letter from Nationwide saying my 6k payment has reduced the duration of the mortgage to 17yrs 3 months and my repayments will remain the same at £361pm.

The mortgage was originally 25yrs term when I took it out in December 2009. Now if I changed it to fixed rate 2.29% my payments will change it £260pm but duration of the mortgage will increased to 20.7mths. Obviously I will continue to make an overpayment of £500 every month.

Just thinking is it best to change it to fixed or should I stay on base rate? The mortgage currently stand at £50200.

Thanks
MS

nellis10

starM wrote: »

Hi,

I have been making overpayment of £500 on my Nationwide Fixed rate mortgage. The fixed ended - end of April and I made a lum sum payment of 6k. Currently on base rate 3.99%. I have received a letter from Nationwide saying my 6k payment has reduced the duration of the mortgage to 17yrs 3 months and my repayments will remain the same at £361pm.

The mortgage was originally 25yrs term when I took it out in December 2009. Now if I changed it to fixed rate 2.29% my payments will change it £260pm but duration of the mortgage will increased to 20.7mths. Obviously I will continue to make an overpayment of £500 every month.

Just thinking is it best to change it to fixed or should I stay on base rate? The mortgage currently stand at £50200.

Thanks
MS

Just my opinion but if you can change it with little or no charge, and decrease you interest rate, I would add the difference between 361 and 260 to your 500 and pay it off sooner.

starM

nellis10 wrote: »

Just my opinion but if you can change it with little or no charge, and decrease you interest rate, I would add the difference between 361 and 260 to your 500 and pay it off sooner.

Hi, I did thought about that but the problem will be once its been changed to fixed rate, the max I can overpay is £500 otherwise early repayment charges may be applied.

nellis10

starM wrote: »

Hi, I did thought about that but the problem will be once its been changed to fixed rate, the max I can overpay is £500 otherwise early repayment charges may be applied.

Ahhh...then would it not be better to stick with the current? Depends what the overall interest difference will be between higher rate shorter term and lower rate/longer term.

But if it's fixed rate you may be insulated short term from any rate rises, although you would pay for it when you return to standard variable rate?

edinburgher

?

Speak to your lender again. If you go back onto a fixed rate, you choose the term. So you could ask for a mortgage with a 17 year term and then make the OPs as you have been doing.

The lender never determines the length of your mortgage, that's up to you.