Mortgage Advice

littlesheepy

This time nearly 3 years ago I was a first time buyer, I'm now thinking of switching my deal (mid deal) as I *think* it may be beneficial. However, being the first time I've had to even look at this kind of thing as I've only been a first time buyer before, I'm unsure on a few things and would appreciate any advice.

I currently owe £55370 on a property with a LTV of 68.4%
term remaining is 27 years 4 months. I'm currently on a Nationwide tracker rate of 2.99% +base rate = 3.49% that expires June 2017.

So I'm currently paying £265 a month, with unlimited overpayments that go in a reserve that I can use at some point during the term if required. I have made very small overpayments (total of about £300 over 3 years)


I'm considering switching and fixing with Nationwide as the fixed rates I'm currently offered are

2 yr Fixed 1.74% 3.99% 3.6% APR £999 £214.29
2 yr Fixed 2.14% 3.99% 3.6% APR None £225.14

3 yr Fixed 2.24% 3.99% 3.5% APR £999 £227.90
3 yr Fixed 2.54% 3.99% 3.5% APR None £236.31

4 yr Fixed 2.24% 3.99% 3.3% APR £999 £227.90 flexclusive
4 yr Fixed 2.54% 3.99% 3.4% APR None £236.31 flexclusive

5 yr Fixed 2.69% 3.99% 3.4% APR £999 £240.58
5 yr Fixed 2.89% 3.99% 3.5% APR None £246.34

10 yr Fixed 2.89% 3.99% 3.3% APR £999 £246.34
10 yr Fixed 2.99% 3.99% 3.4% APR None £249.26

All have a ERC including for overpayments over 10% of initial balance (in my case if I overpaid more than £5537??)


I was thinking of going for the
4 yr Fixed 2.54% 3.99% 3.4% APR None £236.31 flexclusive
As my thinking is, if I switch to this rate, I'll be paying less interest each month and can continue to pay the same as I do now as I can afford that much, but it'll actually be overpaying my mortgage by £30 a month? And also be secure with knowing what I'll be paying for 4 years.
Am I right in thinking this or is there any really stupid pitfalls or anything I've missed or overlooked, not having switched before?

Or am I just better sticking as I am :-s
Any help most appreciated, thank you

lee111s

If you want the security of knowing what you're paying for the next 4 years then yes your calculations seem to be right. Definitely do what you have said though and make sure you do make the overpayments. If you know you can afford them you can simply reduce the term on the mortgage which will increase your contractual payment. This is the best way to ensure you actually do "overpay"

littlesheepy

lee111s wrote: »

If you want the security of knowing what you're paying for the next 4 years then yes your calculations seem to be right. Definitely do what you have said though and make sure you do make the overpayments. If you know you can afford them you can simply reduce the term on the mortgage which will increase your contractual payment. This is the best way to ensure you actually do "overpay"

Great, thanks
I am very strict with my money, so I would definitely make the overpayments, but I definitely see it's a consideration to make I prefer the longer term, lower payments because there's only me, so if anything happened with my job etc. I know it's not much, but it's a little bit less to worry about in the short term.