Natwest Mortgage offer

Nikster73

I'm looking for some advice please.

My husband is a director of his own limited company.  We bought our home 2 years ago and could only secure a mortgage via Precise who are not main stream lenders.
Our 2 year fixed rate which was a very high interest rate, finished in July (2022)  Again we have been faced with a similar issue with account figures ( due to covid and lockdown) and  advised that lenders would not take this into consideration.  We have however managed to secure a fixed rate mortgage with Natwest on 3.22%  - 75% Ltv on a 5 year fixed deal.  I'm panicking slightly as to whether we should accept 5 years? Or should we have gone for a 2 year deal? 

I'm also miffed as our broker Sent us over a mortgage illustration on 24th June with details and repayments based on a fixed rate of - 2.99%.  However the BOE rates have increased and we are now being offered - 3.99% .  After asking the question why was the rate of 2.99% not secured.  The broker advised he only 'dipped' the application on 24th June, and because we were still waiting on further documents, ie UTR number for myself, nothing could be processed!  Could an AIP have not been done at that point to secure us that rate?  Within a 6 week period it's going to cost us an extra £3K over the 5 years.  

I'm guessing there is nothing that can be done.

simon_or

As per what my broker told me, with most banks an AIP doesn't secure a rate, only a full application does. I think Nationwide allows brokers to secure a rate at AIP.

An illustration is merely a quote, it says on it that it's only valid for that day.

If you're not looking to move in 5 years, and the 3.22% rate is affordable then why not fix for 5 years.

Nikster73

We are looking to move within 5 years.  Is it not a good idea to fix for 5 years then? The broker advised porting mortgage over.  

Would we be best securing a 2 year deal if hoping to move to another house? 

simon_or

You could in theory port the mortgage over, however you are then dependent on NatWest to lend what you need and meet their requirements at an unknown future point in time. That may work if you're confident that you won't need the loan size and criteria flexibility that comes with accessing the whole market, especially since you're self employed. If you probe your broker a bit on how confident they are that you will be able to port, I'm sure these caveats will come out.

We have 3 diff sources of income - limited company, salary from a part time job and rental income so porting is too risky for us as bank criteria often changes and we'll need to be able to borrow as much as we can. We will be moving in early 2024 and recently remortgaged to a 2 yr tracker but that's just us, it may not be the right decision for you.

Nikster73

Its not an easy decision to make.  The issue we have if we take a 2 year fixed, is having to go through all this again with accounts and income etc.  We can't keep doing this every 2 years.  We do want to move within the next couple off years though.  I did explain this to our broker  who in-turn suggested a 5 year fixed deal.

If our offer is fir a 5 year fixed and we want to change to a 2 year fixed.  Do we have to go through a new application? 

simon_or

To change from a 5 year fix to 2 year fix at this point should not need a full application but I couldn't vouch for that.

I don't know if your broker has explained what porting means. It's exactly like a full application where you'll have to prove (based on that bank's policy two years down the line) that you can afford the new total mortgage size - amount being ported plus additional money being borrowed.

So in that aspect whether you take a 2 year fix or a 5 year fix (and port in 2 years), it's the same full application process when it's time to move in 2 years.

Nikster73

Thanks.  I didn't realise we would have to go through a whole new application.  Therefore, we will still need to prove earnings etc. 

Right now it's a case of - do we opt for a fixed rate of 3.22% for 2 years or 5 years 🤔  we need to make a decision ASAP, as we are currently on the SVR with precise, paying a hefty price!

doglover34

Personally I've just gone with the 5  years with natwest. No one has a crystal ball and 5 years at this rate seems the best option for us.

What if u dont move in 2 years but 3? If you port your mortgage to the new home you'll keep on this rate. If it's gone up can you afford it?

Nikster73

I think we are best to go with the 5 year fixed.  At least that way we know what we are paying for the next 5 years.  With the hope of overpaying when we can.