Remortgage due-switch both at same time?

kezzygirl

Hoenir said:

kezzygirl said:

Hoenir said:

Any particular reason for wanting to bring them into line? Dropping onto the SVR or paying an ERC is an unneccessary expense. 

There won't be an erc as I can change without penalty in last 4 months of term. Do you think this is a good idea to bring them in line or hold off and enjoy the lower rate on may for a couple of months? If I did it separately, so they're on 2 different mortgages still we would end up paying over 8% interest wouldn't we?

The two sub accounts are totally seperate loans. You can opt for whatever product you wish. There's no requirement or need to consolidate. 

Which is the better option though? Bring both in line together in Feb and miss paying a lower interest for a couple of months on the second one? Or leave them and remortgage at each of their deal expiry? 

Also, if I kept them separate won't this mean we will be paying 8%+ interest on the whole amount,depending on which deal we switch to?

lfc321

kezzygirl said:

Also, if I kept them separate won't this mean we will be paying 8%+ interest on the whole amount,depending on which deal we switch to?

No: this is a misunderstanding. If you switch both in Feb, you'll be paying 4.74% on each sub-account (4.74% on sub-account a and 4.74% on sub-account b). That will be exactly the same as 4.74% on the total of a+b. If you don't switch both in Feb you'll have 3 months paying a bit less (4.74% on a but only 2.74% on b).

The cost of switching the second one early, as you say, is that you'll lose a few months at your current lower interest rate on sub-account b.
The benefit is "?"

So the answer to your question is: is "?" [i.e. what you see as the benefit of bringing them in line] worth the extra interest that switching early will cost you?

I am guessing that the benefit, as you see it, of having both sub-accounts end at the same time is that further down the road you will be able to switch lenders without incurring an ERC or having a few months on the SVR(?) If so, is that future possibility worth a bit of extra interest to you now?

lfc321

PS We don't know how long your mortgage is so this might not be quite right, but I think switching the second sub-account from 2.74% to 4.74% 3 months earlier than you need to will cost you roughly £340 in extra interest. If Nationwide's mortgage rate went down during those three months, you would also lose the opportunity to have that lower rate on sub-account b.*

Is having the end dates in line in future worth £340 to you?


(*Of course, if Nationwide's mortgage rates went up during those three months, you would avoid that higher rate)

kingstreet

Switch the earliest ending tranche to a Nationwide ERC-free tracker product when the current product expires; then switch both parts to the desired product in May, so both will be on the same rate/end date.

Edi81

kingstreet said:

Switch the earliest ending tranche to a Nationwide ERC-free tracker product when the current product expires; then switch both parts to the desired product in May, so both will be on the same rate/end date.

This gives you the best option if you ever want to remortgage to another lender.