Keep ported mortgage or switch

Wellgood

I am with nationwide and am looking to change mortgage products with them (can't leave as partner is unemployed so probably wouldn't pass affordability checks). Currently have
M1= £120,000 @ boe+2% = 2.5% BMR(ported).
M2 = £50'0000 @ 3.99% (SMR).
I have 75% LTV.
Now I know I should switch M2 to a cheaper rate (Think I can get 2 year tracker for 1.89%) But what about M1. Is it best to keep changing this every 2-3 years and potentially pay product fees or keep it ported at boe + 2% and not need to pay product fees every 2-3 years?

Thrugelmir

Once you lose the BMR rate you'll default onto SMR for life. Short term gain more than likely long term loss.

Interest rates aren't just driven by the BOE. Other factors come into play as well. In time rates could drift up naturally.

Wellgood

So are you saying it makes sense to keep the M1(BMR) and keep the BOE+ 2% for life? As I would only lose the BMR if I switched to a 2/3 year tracker that would default to SMR at end of period? But then surely I would get the next 2/3 yr product to avoid going on SMR?

getmore4less

Loads of threads cover this very issue, usualy a few a week have a read for the general consensus.

Thrugelmir

Wellgood wrote: »

But then surely I would get the next 2/3 yr product to avoid going on SMR?

Do you expect this to equal or better BMR? That's the question.

Wellgood

Ok - I've had a look around the forum and on the Internet. And the general consensus is that the nationwide BMR is a good deal at BOE + 2%.
Thing is if I switch now I can easily get BOE + 1% or less.

So is the risk that if I leave my BMR deal that over time these BOE + 1% will disappear?

Does anyone know historically how far off BOE mortgage rates tend to be? Ie - historically have we not always been able to get BOE + 1% deals? Or is that a recent phenomena? Historically have they tended to be BOE + 2% / +3%, etc??? Where could I find this info. Thanks a lot.

getmore4less

You can get base +1%(ish) short term.

What's the best replacement lifetime tracker.


The other variable is fees and you need to factor those into regular changes,

These vary a lot over time from nothing up to £1k+ depending on the lender.

As the debt gets smaller the risk fees will get you get higher.

The other risk is circumstances may change and your ability to change gets compromised.

Thrugelmir

Wellgood wrote: »

Historically have they tended to be BOE + 2% / +3%, etc???

Historically mainstream lenders set SVR at 2% above base. Whether this will continue to be the case going forward one will have to wait and see. As the distortions created by both Treasury and BOE intervention in the money markets subside. Lenders have had to absorb a huge increase in regulatory and compliance costs in recent years. All of which will be built into their pricing models.