Nationwide BMR vs Fixed

lovetone

Hi, I am wondering whether to move my repayment mortgage from the Nationwide BMR (2% above BoE, currently 2.25%) to a Fixed Rate - for example 2 years @ 1.79% (no fee).


On the face of it an easy decision, but the catch is that once I jump ship from the BMR I can't get back in. After the Fixed Rate period ends I will go on the SMR (currently 3.74%).


Obviously I can get another Fixed Rate at this point, but I don't know whether the available Fixed Rates will still beat the BMR.


Any advice?

somethingcorporate

longer term fix?

lovetone

Thanks for your response, but longer term fixed rates (> 3 years) are higher rates and don't beat the current BMR, so not an attractive option.

DonnySaver

I'm in a similar position to you. I'm currently paying 2.25% and have looked at moving to one of their fixed mortgages. However, what I've decided to do instead is make overpayments to my existing mortgage. Are you able to do this?

getmore4less

It's not just the rate you lose there are other benefits to BMR.

lovetone

Yes I can make overpayments, but what I am looking for is the best rate in order to reduce the interest portion of my payments. I don't know whether to go for the attractive fixed rates which are currently less than BMR, with the risk that similar fixed rates (i.e. that are lower than the BMR BoE + 2%) may not be around in 2-3 years time.

lovetone

Thanks getmore4less. I know about overpayment ability, and tracker rate of BoE + 2%, but what are the other benefits?

Mogley

Check this out for other posts on a similar thread.
https://forums.moneysavingexpert.com/discussion/5515430
The main benefit to BMR is being able to drawdown any overpayments in future. This works for me as I am building an overpayment reserve which hopefully I wont need to touch. I can if I need to though. If I don't touch it then I'm using the overpayments to reduce my mortgage term (but you can also choose to reduce your minimum mortgage payment if you'd prefer and keep the mortgage term the same).

lovetone

Thanks Mogley I had already read that thread, but the issue for me is that once I move away from BMR I can never get back: that bridge would be burned. This is what makes it such a difficult decision.

kingstreet

NB Borrowback is only available if your mortgage started before 04/03/2010 and you have not changed products since.

Mogley

It is a dilemma. It's not the cheapest but I think the benefits out way the additional cost. Nationwide send me offers to tempt me away but I resist because being on a pre 2010 BMR mortgage works for my situation.