Nationwide BMR fixing to 10year fixed

BAKER123

Hi

My mortgage is currently split. I have approximately £95,000 in the nationwide BMR and £73,300 in a 5 year fixed @ 5.99% due to end April 2017. Redemption date is April 2037 (22.5years away!).

We paid £200k for our current house in April 2012 (valued at £200k) and I had an outstanding mortgage on a flat I was selling which is where the BMR has come from. We ported the BMR and took out the fixed to make up to the £180,000 we needed to get an LTV of 90%. In hindsight a 3 year fixed might have been the better option but I went with 5.

Now as it looks interest rate rises are getting closer I’m looking at fixed rates and am wondering whether my theory below is correct?

Assuming the house value has increased roughly 12.5% in the last 2-1/2 years to £225,000, our LTV would be 74.8%. I am therefore looking at nationwide mortgages and seeing that a 10 year fixed would be available at 3.94% (reverting to SMR afterwards) and a 5 year fixed at 3.04%

My gut is saying go with 10 years at 3.94% - looking at BoE base rate graph of last 50years, 3.94% looks like a good deal.

Now we’re unfortunately stuck with the 5.99% fixed for now as there’s a £4k fee for early repayment. However, would I be mad to consider fixing the BMR rate now at a premium of approximately £70/month over the BMR rate I’m paying just now (The 5 year rate works out (£26/month over the BMR)? Other threads I’ve read relating to fixing from the BMR; people seem to suggest to wait until the rates start to rise before fixing, my thinking is that the 3.94% will disappear as soon as they do so if I want to tie in long term then better to do it sooner rather than later?

On top of this, we would probably be looking to move house at some point within the next 2 years and therefore would need to port these mortgages also. Is there an issue with porting 2 mortgages and taking out a third with the same provider?

I will speak to a mortgage adviser in the New Year but I won’t get to before then so thought I’d post my musings here to see what others think - Am I being foolish to tie myself into one provider for so long in this way?

Thanks.

dimbo61

I would first of all give the Nationwide a call to see if they will offer you the new 5 or 10 year fix?
Some lenders will not Lend you more money to buy your way out of a current deal you have with them to take out a new mortgage.


Are you looking at the RIGHT deals?


http://www.nationwide.co.uk/products/mortgages/our-mortgages/mortgage-rates?cmpid=PaidSearch_128536&gclid=CO_z-Ku20sICFcJf2wodmJUA6g


They can tell you over the phone what they think your home is now worth! ( Well Woolwich did this for us
5 year fix at 2.44% fee £999 or 2.64% fee FREE
10 Year fix at 3.39% Fee £999 or £.49% FEE FREE




What happens if in 2 years Nationwide say NO to porting the mortgage MORE ERC charges?????


Speak to a mortgage broker

kingstreet

Nationwide won't offer you a transfer to another product unless you pay the ERP for the old one from your own resources.

You can't add it to the loan.

BAKER123

Dimbo,

Thanks for that. I assumed since I was on the BMR that there was no current deal as such as I reverted onto it at the end of my old fix? As I had a fee on the 5% I was looking to leave that running and run the new 10year along side it.

Regarding the stopping of a porting service: that's exactly what I was looking for - something I hadn't thought about thank you! I seem to recall them saying at the time that I could port again but didn't get any details from them and they may well stop it like you say.

Kingstreet, just to confirm, are you essentially saying I can't just fix the BMR portion without paying the fee from the 5% fixed portion? I.e. I'd have to fix the whole outstanding mortgage rather than run two fixed deals along side each other?

Thanks for you responses.

kingstreet

No. I'm saying if you want to replace a fixed rate with another fixed rate and an early repayment penalty is payable, you won't be able to add it to the loan, you'll have to pay it upfront.

BAKER123

Ok thanks. Like I say, due to the fee involved I'm not looking to pay off the fixed portion. I'm just looking to move the BMR portion to a fixed rate so that I essentially have two fixed rates running side by side (if I can do this).

Thrugelmir

You can have as many sub accounts (loans) as you wish. The mortgage is actually the charge placed on the property to secure the debt. For intents and purposes a mortgage without the legalities is just a loan like any other.

The downside of multiple accounts is that you'll pay product fees every time you select a new product. As the balances reduces his will become less and less cost effective. So consolidating makes far more
sense.

BAKER123

Thanks thrugelmir.

I realise what your saying. Had I maybe thought more in the first place, I'd have taken out a 3 year fixed when we moved house and then as you say I'd have consolidated the mortgages into one this coming April when it expired.

However, my thinking is that if I wait to consolidate them in April 2017 when it would be possible, interest rates will have already risen to a rate where I've lost out anyway.

This is the reason I'm asking such things now. Trying to avoid a similar mistake.

Thrugelmir

Perhaps worry less about interest rates and focus more on the debt you owe. As you've no ability to control interest rates. Fixing is a gamble at any time. Instead overpay the 5.99% fix by the maximum amount you can afford\are allowed to. The saving in compound interest is your ally.

mambo69

how can you consolidate? when i switched from nationwide to HSBC i ended up bringing the main mortgage and three smaller additionals across as 4 seperate accounts?