Remortgage now impossible?

rtho782

We recently switched from our 2 year fix to a 2 year tracker with Nationwide, planning to go on to a fix when our LTV hits 80% (from 95% when we purchased) in about 9 months.

Of course, in the few days since, Nationwide have ramped their 5y fix rates from 2.24% to 2.74% over the course of a few days despite no changes to base rate.

We looked at other lenders, some of which (TSB, Yorkshire, Principality) will offer us 2-2.04%, but it seems we can't get these on the basis of affordability, even though we want to increase the term from 15y to 23y (this was always the plan, pay down capital for first two years then extend term).

I guess this means we're stuck with Nationwide, but they mentioned if we wanted to change the term we had to do a full application.... which I guess means affordability hoops?

We borrowed £218500 at the start, owe £200000 now, and were paying £1488 a month, but it seems that now we can only borrow £174k ish, and "can't afford" £900 a month.

I feel like there isn't much we can do here?

getmore4less

The breakpoint with NW is 75% 1.99%

which tracker did you get?

Thrugelmir

rtho782 wrote: »

Of course, in the few days since, Nationwide have ramped their 5y fix rates from 2.24% to 2.74% over the course of a few days despite no changes to base rate.

There's no connection. Base rate is variable. Lenders woul be shooting themselves in the foot to offer fixed rates in a period of time will ost certainly be rising. The increased interest rate reflects the increased cost of borrowing the lender.

rtho782

I'm more annoyed about the mortgage prisoner aspect stopping me changing lender than the fact that Nationwide have changed their available rates.

If I could change lender, I could get 2.04% still from TSB or Yorkshire.

Brock_and_Roll

FWW fixed rates offered by banks are not directly affected by the base rate.


Without going into the complexities, in a nutshell fixed rates are based on a series of interest-rate swaps based off the forward interest rate yield curve.


So in plain English, the base rate might still be 0.5% but the yield curve is now steepening as money market traders anticipate higher interest rates in the future.