Nationwide BMR Advice, Should I get a fixed deal??

mattl

I currently have 20 years left on my Mortgage (was a 30yr term). I currently have about £115,000 left to pay. With the current rate my payment is about £590 at the BMR 2.25%.

I am thinking about switching to a fixed deal and having the term changed to 10 years. I have found a deal that would fix at 2.49% for the remaining 10 years and I could afford the payment of about £850 a month.

Any suggestions? Or anything I may have missed? In my mind it mitigates any risk of a rate rise and takes 10 years off my mortgage. It all depends if any better deals come on the market or the BOE rate drops even more, has anyone got a crystal ball?

Thanks.

lee111s

If you're happy with that rate and the feeling of knowing you'll be mortgage free in 10 years from now, go for it!

2.49% is still an incredible rate to be borrowing money at when you think about it.

mattl

I think I have cocked up my sums somewhere, more like £1000 a month repayment i think. I think I would have to go for a 14 year term to get the payments to about £800ish and then try and overpay where i can to try and do it in the 10 years.

AnotherJoe

I would take the lowest rate you can and overpay. If and when rates look likely to rise that will be gradual and telegraphed a long way in advance, that will be a time to fix.

In the meantime you'll be making bigger inroads into your loan that will most likely far more than compensate for any rise in rates later on.

Brexit gives the UK no incentive whatsoever to raise rates for at least 3 years, most likely 5, because if other countries are going to start putting import tariffs on us, we can retaliate in advance by having a weak currency, making our exports more competitive and our imports more expensive (encouraging UK local industry)

Thrugelmir

As the balance owed reduces then remortgaging becomes financially unviable. A 10 year fix would enable you to make sizable inroads into the debt.

AnotherJoe

Thrugelmir wrote: »

As the balance owed reduces then remortgaging becomes financially unviable. A 10 year fix would enable you to make sizable inroads into the debt.

Such a situation would be at least five years down the road though. Compare to that a five year year fix would therefore be better (and fixes may limit how much you can overpay). OP may anyway better off with several 2 year deals and make overpayments on those or if not allowed save in a higher rate account and then put that into the next 2 year deal, rinse and repeat.

Mogley

Nationwide's BMR offers some great terms and conditions on overpayment. There is normally a drawdown facility if ever you want the money loaned back to you for home improvements, payment holidays and unlimited overpayments etc. Check you have this as new mortgages will not be as generous and flexible with their terms.


I have two mortgages with Nationwide. One was ported onto my house 4 years ago which I've kept on the BMR and have a Further advance which I keep fixed (fixed last year at 2.79%). I overpay on the BMR each month knowing this can help mitigate any future rate rises but take all the benefits described above. The fixed mortgage gives me peace of mind but does not have the same overpayment benefits so at this time I am paying the minimum amount.