Advice after Fixed Rate Mortgage plan expires

kevmull

My Nationwide 4 year fixed rate (3.49%, SVR 3.74%) mortgage expires 30 Nov 2016 and although it's a few months away am currently seeking advice on what to do after that.

Details (as of 22 Aug 2016).
Purchase price: 155K
Current property value: 173K
Owed: 98K
LTV: 57%

After it expires I'm not sure whether to take a tracker, another fixed rate 2yr or 5 yr or a variable rate mortgage.
Would any of these be classed as 're-mortgaging' or 'switching' and include fees (Nationwide switching incurs no fees)?

Should I rely on a Nationwide Mortgage advisor ? I assume they will only look out for their own interests. Or an independent broker?

I will have 50K savings that I can use to overpay once it expires. Would this be best when the current mortgage plan expires and reverts SVR is at 3.74% or used as a deposit on a new mortgage plan.

Note, my total interest spread over all my savings accounts is about 6% and am still under the PSA 1K allowance. Would it still be worth overpaying with this in mind?

I'm 50 years old so am looking to reduce the term if I can (currently 16 years)

Many thanks

SavingSteve

Unless you're somehow earning more than 3.49% net on your savings see how much you can pay down on the mortgage now. You should be allowed 10% of the mortgage balance without fees.

When speaking to anyone about a new deal mention the lower amount you want to borrow (i.e. after you've paid off from your savings).

Speak to Nationwide and see what they can offer you, they may be able to offer an existing customer deal that others can't better. Also as you're not moving provider or increasing lending you'll save legal fees and unless in dispute about current LTV should save valuation fees. This would be a product switch with Nationwide.

At the same time engage an all of market broker. Tell them you are also speaking with Nationwide about existing customer deals, but want to see what they can offer, this would be classed a remortgage. To get an idea of what is out there punch in your figures (reduced for the 50k) onto the moneysupermarket mortgage comparison.

Compare total cost of the Nationwide and Broker quotes (i.e. product fees, legal fees, valuation fees as well as interest comparison) to see what is best for you.

Lastly, reducing term shouldn't be a problem with either, as long as you can pass the affordability checks associated with the higher monthly payment.

Oh, and your personal preferences on risk, and how much you're willing to take, will determine what type of mortgage (variable/fixed etc) you take out.

AnotherJoe

After it expires I'm not sure whether to take a tracker, another fixed rate 2yr or 5 yr or a variable rate mortgage.

---

Whilst as they say, "past behaviour is no guide to future performance", you can see how much opting for a fixed term product cost you last time round in terms of a higher interest rate than needed,

Given the likely low interest rates for the next 2-3 years at least, and the high LTV and the relatively small mortage you'll have, meaning that even a big hike in rates would in real terms only be a small amount, it's my opinion that the odds are strongly in favour of you taking a product with the lowest possible interest rate ( balancing any fees needed to be paid).

Saving Steve covered all the other points clearly.

tacpot12

Only reverting to the SVR doesn't count as remortgaging or switching.

Do you have any pension provision that would allow you to take a lump sum and clear down your mortgage at the point your retire?

If not, and your pension provison won't cover the mortgage and your outgoing then shortening the mortgage to end when you retire is a necessity, and hence would justify giving up some of your savings.