Do I move off of the BMR?

thomas502

Hi all,

Slight dilemma here and it is driving me a little mad..
Currently we have around 76k on Nationwides BMR @ 2.75% due to end 2038.
My dilemma is do I move off of the BMR as mortgages rates are much better at present than 2.75%.

I do have another mortgage (76k was ported over) which is around 52k on 1.54%...…due to be paid off the same time.


What would you do?

getmore4less

Which of the other benefits of BMR might you use?

thomas502

Hi,

well apart from being no more than 2% above the bank of England base rate there are no other advantages....
The only advantage on the BMR is when interest rates go up.

getmore4less

Only when there are no rates with a lower margin and that has not been the case for a few years now for anyone with decent LTV.

as you don't know about the other benefits you won't miss them probably best to get the rate down.

Thrugelmir

If there's a cheaper 5 year or longer fix available from the NW take it. Then use the monthly saving to overpay the mortgage. Ultimately it's the amount you owe that will determine the interest you pay. Reducing the debt in essence provides insurance. May not be required. However easier to focus on matters that you can control than speculate on the unknown. These are uncertain unusual times.

londoner62

So, I have just over three years left on my Nationwide BMR deal. There are a couple of extras worth considering.

Unlimited overpayments and payment holidays.

I was able to make a heap of overpayments when I had a job that had loads of overtime. That brought down capital owed and subsequently interest accruing.

Then, I realised I could take payment holidays or monthly underpayments! Jackpot!!!!

By paying three months worth of mortgage payments early, letting it be credited to my mortgage account, waiting a couple of days then calling up and requesting 3 months mortgage payment holiday, I had paid my three months upfront and pay less interest on capital remaining!

Before my latest/current-overpayment/holiday my mortgage was £183 per month; when I have to start paying again in May, my monthly payment will be £178 per month!

A fiver a month less might not seem a lot but multiplied by the (will be) 36 months remaining i will have saved one months mortgage payment in the remainder of the term!!!

Hope this makes sense to any that are reading this and any questions, feel free to ask.

Paul

getmore4less

Before my latest/current-overpayment/holiday my mortgage was £183 per month; when I have to start paying again in May, my monthly payment will be £178 per month!

A fiver a month less might not seem a lot but multiplied by the (will be) 36 months remaining i will have saved one months mortgage payment in the remainder of the term!!!

Those numbers do not add up.

£183pm @ 2.75% 39 months is a mortgage of £6,820

total interest over 3y3m = £317


less 3 payments of £183 = £549
new balance £6271

+ 3 months interest @ 2.75% = £43

amount owing @ 36 months is £6,314 @ 2.75% £183pm
total interest over 3y = £271


£178pm @ 2.75% 36 months is a mortgage of £6,144
total interest over 3y = £264.

£170 unaccounted for.

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Sanity check

£5 per month saving over 36 months is £180 when the total interest was £317 over 3y3m

3 overpayments is not going to reduce the total interest by more than 50% on a 36-39 month loan.

kingstreet

BMR borrowers retain the facility to borrow-back overpayments as well.

getmore4less

Sanity check 2,

3 payments of £183 paid in one go is like paying one payment 2 months early and one payment 1 month early.

Real saving about £1.25.