Nationwide Existing Customer Remortgage

gibby9

I am coming to the end of a two year fixed rate with Nationwide who are offering competitive rates to their existing customers to remortgage.

I have checked using their online system, however it simply shows the new rates offered at a lower monthly amount keeping the existing term. Ideally I am looking to switch to the lower interest rate keeping the payment roughly the same as now and reducing the term.

Does anyone know if this is an option, or would I be classed as a new customer if looking to change the repayment term?

somethingcorporate

It should be an option (we did this when we remortgaged with NW) but you will need to do it over the phone rather than online.

Have you looked elsewhere? Nationwide are not that competitive at low LTVs.

kingstreet

It's only a remortgage if you change lenders while remaining in the same property. You are looking for a customer retention product.

You can either;-

keep the same mortgage term and have the lower contractual monthly payments and make voluntary overpayments at your discretion, which will reduce the term

or

you can go through the "advice" process and have your affordability reviewed to see if the lender (in this post-MMR world) feels you can afford a shorter term and higher contractual monthly payments.

The latter would mean if you had a change of circumstances and could no longer afford the higher payments, you would have to make a case for a term extention due to hardship.

The former option offers more flexibility and provides the same end result if you are disciplined enough to adopt it and stick to it.

gibby9

Thanks for the advice. So essentially I could agree a lower interest rate, however leave my current monthly payment the same and this automatically reduces the term as the overpayments are made?.

Current LTV is around 78%. My current rate is 4.14% with 28 years to go. Dropping the term to 25 years at a lower fixed rate, 2.14% leaves the monthly payment approximately the same. Or dropping further to 20 years is only around an extra £40 per month.

I'll do some more research and give Nationwide a call.

kingstreet

If you pay £x each month, the mortgage will be repaid over y years regardless if the payment is 100% contractual, or part contractual and part voluntary.

gibby9

kingstreet wrote: »

If you pay £x each month, the mortgage will be repaid over y years regardless if the payment is 100% contractual, or part contractual and part voluntary.

Sorry not sure what you mean?

If I pay £x with an interest rate of 4.14 the mortgage is repaid after y years. However if i also pay the same £x with an interest rate of 2.14 then surely y would be different?

kingstreet

Assume the rate is the same. Of course it won't be the same if the rates are different.

All I'm talking about is the difference between a contractual monthly payment of, for example £350.27 and contractual and voluntary payments, which added together equal £350.27.

In those circumstances, the mortgage will be repaid at the same time.