Good time to move from Nationwide BMR?

RapidsJohnson

We still have approximately £180,000 left over 15 years on our Nationwide mortgage that is currently on the BMR (less than 60% of value of house). We have remained on the BMR as it previously seemed a smart thing to do but are starting to question this....

Now we can get a tracker deal even staying at Nationwide for 3 years that is base rate + 1.19%. This is without fee, with ability to overpay, but accepting that we would transfer to SMR at end of term and never be able to get back on the BMR. We, of course, would still have 12 years left to go..

We would never look to sit on the SMR, but take another deal available at the time. So I guess we are left wondering what tends to drive the deals offered. We accept that the BoE base rate is likely to rise in that time, but is it competition between providers that have led to deals being as low as tracking at 1.19% as they are now?

Is tracking at 2% something that historically was a great deal but nowadays is not so? And what else should we be considering if we are thinking about giving our BMR up?

dimbo61

Now with £180,000 still owing and 15 years you must be paying about £1200 a month ?
If you went onto the 1.19%+base so 1.69% you would be paying £1133 a month and save 36 X £67 a month over the next 3 years £2412.
However you would then go onto the SMR of 3.99% for the £147552 you would still owe and pay £1291 a month for the next 12 years!!
If you stayed on the BMR you would owe £149182 and continue to pay £1200 each month saving £91 a month compared to the SMR.
Both are variable so if Interest rates go up it applies to both deals.
Your call.
If you need security how about a 5/10 year fix ?

http://www.nationwide.co.uk/products/mortgages/first-time-buyers/mortgage-rates

They have a 4 year fix at 2.29% and 5 year fix at 2.44%with NO FEES

controversy

RapidsJohnson wrote: »

We still have approximately £180,000 left over 15 years on our Nationwide mortgage that is currently on the BMR (less than 60% of value of house). We have remained on the BMR as it previously seemed a smart thing to do but are starting to question this....

Now we can get a tracker deal even staying at Nationwide for 3 years that is base rate + 1.19%. This is without fee, with ability to overpay, but accepting that we would transfer to SMR at end of term and never be able to get back on the BMR. We, of course, would still have 12 years left to go..

We would never look to sit on the SMR, but take another deal available at the time. So I guess we are left wondering what tends to drive the deals offered. We accept that the BoE base rate is likely to rise in that time, but is it competition between providers that have led to deals being as low as tracking at 1.19% as they are now?

Is tracking at 2% something that historically was a great deal but nowadays is not so? And what else should we be considering if we are thinking about giving our BMR up?

What drives the rates is the Federal Reserve over in the US. The FED has been doing money printing (Quantitative Easing) and putting all that money into Wall Street. The result has been a US economy or global economy on life support.

You should have noticed that when the global markets plummeted a few weeks ago Janet Yellen the FED chairman was talking about rising interest rates. She then later came to the conclusion that the FED could never raise rates and spoke it out on national US television.

As for Mark Carney over in the UK don't listen to a word he says. He is just a YES man who takes his orders from the FED.

So basically the only day when interest rates go up is going to be the day when the house of cards falls down.

Note: UK borrowing costs are at 2% at the moment. If we put up our interest rates our foreign borrowers might start demanding bigger returns on our GILTS (Government Bonds) and this will send Government borrowing sky high meaning more austerity!

You say you have £180,000 on a variable rate? I think your playing with fire to be honest.

I would advise you to get a 5 year fixed mortgage because these central bankers really cannot be trusted at the moment.

controversy

dimbo61 wrote: »

Now with £180,000 still owing and 15 years you must be paying about £1200 a month ?
If you went onto the 1.19%+base so 1.69% you would be paying £1133 a month and save 36 X £67 a month over the next 3 years £2412.
However you would then go onto the SMR of 3.99% for the £147552 you would still owe and pay £1291 a month for the next 12 years!!
If you stayed on the BMR you would owe £149182 and continue to pay £1200 each month saving £91 a month compared to the SMR.
Both are variable so if Interest rates go up it applies to both deals.
Your call.
If you need security how about a 5/10 year fix ?

http://www.nationwide.co.uk/products/mortgages/first-time-buyers/mortgage-rates

They have a 4 year fix at 2.29% and 5 year fix at 2.44%with NO FEES

The OP might be better going for the first direct mortgage at a slightly higher 2.54%. The benefit with that is it is 5 year fix with unlimited over-payment.

http://mortgages.firstdirect.com/mortgage-rates/product/5-year-fixed-repayment--fee-saver~61

dimbo61

Without checking the T&C,s of the fixed offer I would still guess that most deals allow 10% overpayments each month/year.
On £180,000 that is nearly £18,000
Even if only allowed £500 a month that is £6,000 a year.

dimbo61

The poster is already with Nationwide and may be able to book a new deal 3 months in advance and pay NO remortgage fees What so ever, moving lenders will have some costs involved !