Mortgage Rate dropped - new product due to start on 1st Aug

michele-p

Hi all,

Our mortgage is with Nationwide, and our fixed mortgage ends on July 31st. Last week (July 18th) after reading lots that the rates maybe aren't predicted to go down any further I applied for a new 2 year fixed online at 4.99%. I read articles (not by Natiowide) which stated you can apply for the rate at any time, and change to a different offer if the rates drop before the start date of the new product.

Just spotted today that Nationwide have reduced the rate again to 4.92% - I called them as the offer letter arrived today by post from last week. They have said that the last date I could change the product was July 20th, and that there is no way to swap to the lower rate now. There is also no 14 day cooling off period.

I'm a bit gutted of course, I thought I was doing the right thing not going on to the 7.99% base rate and able to keep a very close eye on things this week, but I should have waited until the very last day before committing.

I just wanted anyone else in a similar position aware to be careful when nearing the end of a fix and start of a new product.

michele-p

This is the wording on their site:

When you can cancel your switch

If you want to cancel, you need to do this on or before the 20th of the month before your new deal is due to start.

For example: if your start date is 1 August, you have up to 20 July to tell us you want to cancel.

If the 20th is a Saturday, Sunday or bank holiday, you also have the next working day after that to tell us.

This also means you won't be able to cancel if you applied to switch after the 20th for a deal that starts the following month.

So it's my own fault for not fully realising this - I just wanted to make others aware.

ACG

If you had not switched by the 20th, I think you would have spent a month on the SVR, so any savings would likely have been eaten up by a month on the higher rate. 

That obviously doesnt help, but most lenders have a cut off point. 

Someone made a post on here about nationwide having a habit of reducing rates after the 20th, they made a complaint to nationwide (which was rejected) and then to the ombudsman (which I think was also rejected). 

You might be gutted, but as I said the SVr for a month would have eaten into those savings if not cost you more than. In addition to that, Nationwide have been the cheapest lender for most of the year for most people, so you should be thankful you are with them and they have lowered their rates a few times in the last month. You have just missed out on the latest of many and you will miss out on more over the next 6 months probably. But by the time your deal finishes, hopefully you get a lower rate than you have this time and you can benefit from that a little more. 

Its been a bit of a hard 2 years or so for mortgage rates. 

michele-p

Thank you ACG, your comment has put my mind at rest. We had considered waiting another month, on the SVR, but realised the interest drop would have to be huge to make up for the 1 month at a much higher rate. So I'll stop looking, know I got the best rate on the day, and hope that in 2 years time there's a great deal around!

We do appreciate we've had great low fixed rates for the past however many years, and if we'd have fixed even a few weeks before they were still over 5%. 

kingstreet

The 0.07% difference is £11.66 per month on a £200k mortgage so hopefully, it's not going to be too costly.

michele-p

Thanks Kingstreet, luckily not as much as that even! I was kicking myself when I found out, but not going to let it worry me.

Homeowner1654

Out of interest, how much were you paying on your previous fixed rate? Have your monthly payments gone up or down?

I'm looking to do a product transfer in a few months so trying to anticipate what our monthly outgoings will be. Currently paying £589pm, which will go up to £828pm on SVR - if my monthly payments are likely to be much higher than the £589 we are currently paying then we probably need to sell the house.

michele-p

Hi Homeowner1654 - we come off a 2 year fix on the 31st it was 2.89% - so there is a big jump to 4.99%, for us it's about £140 extra a month on the new deal. Hoping the rates drop further for you for the end of yours. You can work costs out for now and keep an eye on things, there's mortgage calculators on Nationwide site which would show you what you'd pay on today's rates.

RelievedSheff

Homeowner1654 said:

Out of interest, how much were you paying on your previous fixed rate? Have your monthly payments gone up or down?

I'm looking to do a product transfer in a few months so trying to anticipate what our monthly outgoings will be. Currently paying £589pm, which will go up to £828pm on SVR - if my monthly payments are likely to be much higher than the £589 we are currently paying then we probably need to sell the house.

Go onto any of the major lenders websites and they have calculators which will show you the available rates and what your repayments would be. It will give you an indication of what ball park your new repayments are likely to be in.

BarelySentientAI

RelievedSheff said:

Homeowner1654 said:

Out of interest, how much were you paying on your previous fixed rate? Have your monthly payments gone up or down?

I'm looking to do a product transfer in a few months so trying to anticipate what our monthly outgoings will be. Currently paying £589pm, which will go up to £828pm on SVR - if my monthly payments are likely to be much higher than the £589 we are currently paying then we probably need to sell the house.

Go onto any of the major lenders websites and they have calculators which will show you the available rates and what your repayments would be. It will give you an indication of what ball park your new repayments are likely to be in.

Likely to be wrong for that poster, as on their own thread they have clarified that they are with Bluestone.

RelievedSheff

BarelySentientAI said:

RelievedSheff said:

Homeowner1654 said:

Out of interest, how much were you paying on your previous fixed rate? Have your monthly payments gone up or down?

I'm looking to do a product transfer in a few months so trying to anticipate what our monthly outgoings will be. Currently paying £589pm, which will go up to £828pm on SVR - if my monthly payments are likely to be much higher than the £589 we are currently paying then we probably need to sell the house.

Go onto any of the major lenders websites and they have calculators which will show you the available rates and what your repayments would be. It will give you an indication of what ball park your new repayments are likely to be in.

Likely to be wrong for that poster, as on their own thread they have clarified that they are with Bluestone.

Yes that was later clarified in a separate post.

A broker is their only real chance in their situation.

Given the circumstances a product transfer may not be forthcoming from Bluestone given their eligibility criteria!