Mortgage musings

maccamarsh

We have a Nationwide repayment mortgage (£46k) and further advance (£10k) secured on our property, value circa £145k. The mortgage has nine years left to run and is at a capped variable rate of currently 2.75%, no more than 2% above the Bank of England base rate. The further advance has a little less than nine years remaining and we are paying SVR 4.24%. Overpayments allowed on both (up to £500p per month I think), but we somehow never manage to find spare cash to do that regularly. No early repayment fees on either.
My current thoughts are take out an unsecured loan to pay off the further advance - I have had a quote from M&S for 2.9% over seven years which would pay it off 18 months quicker and is only about £25 more each month which we can probably absorb. Although presumably interest is fixed on unsecured products so when we win the lottery we'll still have to pay off the full amount.
And I'm thinking leave the mortgage where it is as it's a lifetime loyalty rate.
Am I missing anything obvious? Thanks in advance.

kwame41

Why dont you try and remortgage (56K) at a lower rate for nine years or less?

There are some good deals around with no fees. You have good loan to value so should not be an issue provided you have a good credit record and can pass affordability checks.

HSBC are offering 2.04% fixed for five years. You can overpay by 10% each year. No setup fees.

maccamarsh

Thanks Kwame. I have been pondering that too but the trade-off is reverting to a SVR or moving to another product at the end of the term, when with Nationwide we have this capped rate for the full term. I will take a look at HSBC though, thank you for the tip.

nick74

maccamarsh wrote: »

Thanks Kwame. I have been pondering that too but the trade-off is reverting to a SVR or moving to another product at the end of the term, when with Nationwide we have this capped rate for the full term. I will take a look at HSBC though, thank you for the tip.

You mention it being a 'capped rate', but at what rate is the cap?

maccamarsh

nick74 wrote: »

You mention it being a 'capped rate', but at what rate is the cap?

Ermmm, think I may have got my terms muddled up, sorry. I think it's probably more like a tracker - i.e. it's guaranteed at no more that 2% above the Bank of England base rate for the rest of the term...