Nationwide Bmr

harry33

Hi, im still on the nationwide bmr 2%above base rate. I'm not sure wether to stick with it, take out a lower 2/3 year deal or go for a higher rate 10 year deal. Is anyone still on the bmr or is it time to leave for short term savings or long term security? I know everyones situation is different but having been toying with the idea of changing for the last year...if only we had a crystal ball!!

AnotherJoe

Plenty of posts here along the lines of "should i take a 2,3, 50 or 10 year fix".

As said, crystal ball territory though my view is that when you do the maths and consider chances of a rate rise (low), in most cases the shorter fix with lower rate outweighs the longer term higher rates.

Only you know how much certainty is worth to you. I would though get off the Standard Variable Rate (SVR) (the normal abbreviation used here , i presume that is what you mean by bmr (? basic mortgage rate?) unless you are planning a move soon. And indeed thats another benefit of a shorter fix time, less time you are locked into an expensive ERC if you need to move.

tlc678910

I think you need to at least crunch the numbers to decide. So for example if you are paying 2.5% at the moment and you were able to get 1.5% or 2% how much does this save you? (how big is your mortgage).

If you save £50 a month but there is a £1K fee it will take the best part of a 2 year term to get your fee back and then you will either need to find another fee or go onto that lenders standard variable rate and most of them are much higher than the nationwide one that tracks at no more than 2% above base rate.

I think we would need to know how big your mortgage is/ how much equity, if you have a good credit history to be able to give any useful help.

Tlc

edit re going for a higher rate long term fix. While nothing is ever for certain we are generally expecting that when rates do go up they would go up only slowly (financial commentators talk about a "new normal" for interest rates. If you are paying a higher rate to safeguard against future uncertainty you will be paying more than you need to be for quite some time imho.

Thrugelmir

How much lower than 2.5% will you get currently?

What's on the follow on rate for the new product?

2% above base is likely to be at the least the norm in the future. As lenders have to make a margin on money advanced. The artificial distortions to the mortgage market will slowly unwind. As a consequence rates may rise quicker than BOE base rate does.

harry33

125k left, house is worth about 250k. Good credit rating.

tlc678910

Hi, I just put a few numbers in the gocompare site and a mortgage interest calculator. I had to make a guess at your term and put 20 years.

GoCompare shows some top results of 1.39% (variable tracker) for 2 years with Natwest and Santander however the cheaper of the fees is £995.

On a 20 year mortgage this payment will be £596.88 (for the first 2 years). At 2.5% (the Nationwide rate) for 20 years the cost is £662. So £65.12 a month cheaper or 1,562.88 after 2 years.

So with the Santander deal you could expect to save £562.88 over 2 years (if your term was 20 years). However the follow on rate is 4.74 variable so you would then want to continue finding mortgages that outperform your current mortgage paying further applications and fees.

For 3 year fix a "best buy" is 1.74 (variable) (translates to £617) so saving£45 each month and £1620 over 3 years but with a £995 fee (virgin) it saves £625 over the 3 years years.

You probably could save a little but personally for the sums involved vs the ongoing hassle I would sit tight.

I was surprised the 10 year fix was as cheap as 2.94% (fixed) TSB making mortgage payments of £689.50 (£1395 fee) so if you are concerned that mortgage rates are going to rise you might consider it I guess. £27.50 a month more than now and £4,695 more than your current payment over 10 years (including the fee) but obviously your current payment will go up if rates rise.

Tlc

harry33

Thanks, i think i will sit tight for now but am definitely keeping my eye open for the 10 year deals... if they drop any lower i might just fix for 10 years...yes about 20 years left on my mortgage.

emg

I'm on the BMR as well, it is not the same as SVR. Nationwide SVR is currently 3.99% but BMR is always 2% above the BOE interest rates. Once you come off the BMR you can't go back as it is no longer offered to new customers. I'm having similar dilemmas really, for years the BMR has been a really good rate but I'm also starting to get itchy feet and am wondering when to jump to a new fix!

getmore4less

AnotherJoe wrote: »

Plenty of posts here along the lines of "should i take a 2,3, 50 or 10 year fix".

As said, crystal ball territory though my view is that when you do the maths and consider chances of a rate rise (low), in most cases the shorter fix with lower rate outweighs the longer term higher rates.

Only you know how much certainty is worth to you. I would though get off the Standard Variable Rate (SVR) (the normal abbreviation used here , i presume that is what you mean by bmr (? basic mortgage rate?) unless you are planning a move soon. And indeed thats another benefit of a shorter fix time, less time you are locked into an expensive ERC if you need to move.

SVR it is not normal term when dealing with Nationwide mortgages as they have two follow on rates on their mortgage products

BMR(Base Mortgage rate) the older no longer available Base + 2% tracker rate.

SMR(Standard Mortgage rate) like a SVR.

The two have very different T&C attached and the BMR has some features(like getting overpayments back) that people should think very carefully about before giving them up, it is not just about the rate with BMR.

Have a read of what Nationwide have to say.
http://www.nationwide.co.uk/products/mortgages/existing-customer-switching/help-and-guides#xtab:base-or-standard-rate