New deal advice

Marvel1

Had a letter this monrning from Nationwide about changing my mortgage if I wanted.

Currently I am on the Base Mortgage Rate (BMR) which is gurannted to be no more than 2% above the Bank of England base rate, so currently it's 2.5%.

I have £34,159 remaining with 16 years and 8 months left.

At the moment I pay £257 a month, and some months top up £143.

My circumstances are single, living alone, earning £19,500 gross annually.

At the moment I pay £257 a month, and some months top up £143, and some months e.g. June, July I don't and keep it back for say days out with my Niece and Nephew.

A copy of the reverse letter is below, I'm tempted by the 10 year fixed at 3.04% as it's long term and £0 product fee.

However at the end of term it will switch to a Standard Variable Rate (SMR) for the remaning 6 1/2 years, which no doubt is the worst one to be on and means fussing around looking for deals and avoiding the product fee. I have only ever had a 2 year tracker since taking out the mortgage in 2007 and been on the BMR since 2009.

What is the Early Repayment Charge?

I welcome any advice, is it also worth speaking to their mortgage advisor?

getmore4less

I'm tempted by the 10 year fixed at 3.04% as it's long term and £0 product fee.

£34159 @ 3.04% 10 years £331pm

That is well within your current overpayments, average £74pm or less than 7 of your current overpayments.

Even if you just paid £225 for a 16y term at end of fix you would owe £14770 so the rate is less of an issue


Are you sure your current payment is right?
£34,159 @ 2.5% 16 years is £216pm


Remember if you move away from the BMR you lose some facilities like get back overpayments.

Marvel1

getmore4less wrote: »

Are you sure your current payment is right?
£34,159 @ 2.5% 16 years is £216pm

Yes, as the mortgage was for 25 years and I had £58,500 (roughly). It was a 2 year tracker and then went straight to to the BMR.