Nationwide or First Driect (5yr fixed)

Cash-Is-King

This is such a volitile market as you are all aware.

Update on my situation:- FD contacted me again yesterday to confirm my telephone interview date (wednesday), I have a letter stating they will honour their deal 5.29% Fixed for 5years. They explained draw down will take approx 10-12weeks - that means me paying N/Wides SVR for 1-2 months - total.

I contacted N/Wide on Tuesday - They took my detals and offered me their Loyality Deal - 5.83% fixed for 5 years and sent me the Key Facts illustration. They explained I would have 7 days to consider.

7 days is no time especially considering they hiked this "Loyalty" deal today to 6.19% today...

The void between FD's 5.29% and N/Wides 6.19% is now too high.

Do you think I should stick with FD (on the basis they honour their letter terms) or should I snap up the 5.83% before the 7 day period elapses?

_Andy_

Stick with FD.

Cash-Is-King

So I have now received my FD application pack after my phone interview (my interview was interrupted by FD's 'Snowball fight' - everyday @ 11.30 they throw sponge balls at each other to release the pressure - that idea I want to introduce to my office!!).

Now I have realised that as the 5 year fixed from 5.29% Offset is an INTEREST ONLY mortgage I have to make up the extra amount (approx £280 per month) to repay the capital either as a separate arrangement or pay straight into the FD alongside the Interest Only amount.

My question is this:- Should I put this £280 into the FD account or should I be storing it in my NSandI direct ISA (up to £3K a year) over the term of the Mortgage and stick this in the FD account near the end of the 5 year term?

I was wondering if the benefits of the tax free ISA over the 5 years (or some other saving plan product) would be the way to go. Please let me know your thoughts on my thinking!!

$$Cash££

Caps_4444

You can get the FD mortgages if you apply for their bank account. I did last week and then while my account application is in process applied for their 5 year fixed @5.29 and i have that reserved now. Just need to be a customer...the rate at 5.39 is still great for 5 years!

MarkyMarkD

Do you really, really want fixed? Northern Bank do a tracker at a 5.35% rate which is better than anything available outside Northern Ireland.

Bank base rates are really not likely to rise in the near future.

Cash-Is-King

MarkyMark - do you know what? My gut instinct is telling me that a BoE base rate tracker could be good as I believe that the base rate will be close to 4 in two years time, however the amount of people with better financial advise pedigree that me saying 'batten down the hatches - fix' over the past few months has been overwhelming.

http://www.northernbank.co.uk/PersonalMortgages

Also, cant see if this tracker is linked to BoE base or Northern Banks base (NBBR) - http://www.northernbank.co.uk/PersonalMortgages

My LTV rate = 41.05%, it says the overall cost for comparison is 5.6% for the N Bank tracker - the Key Facts for the FD states a 5.9% cost for comparison... QUESTION - Is the cost for comparison difference significant enough to go with the lowest?

I want to get the best product and pay more off my mortgage at the lowest interest rate - as we all do.

My main questions here is this - Why are fixes currently at higher percentages than trackers? - and why are the ? Northern Bank example - for me borrowing £117K against a £285K house for 20 years
NOTHERN BANK TRACKER = 5.35% **5.6% cost for comp** - FEE = £799
NOTHERN BANK 5yr FIXED = 5.99% **7.0% cost for comp** - FEE = £799


Officially my head is in a spin!! I have till Monday 10am to reserve the FD 5 yr and I am regressing... Can someone chip in with their thoughts on the above and also comment if Fixed is the way to go even though the "Overall cost for comparison" is higher??


Thanks

££Cash$$

_Andy_

Overall cost for comparison takes into account the SVR the mortgage will go after the fixed rate period etc. Unless you're planning to stay on the SVR then it's not of relevance.

Cash-Is-King

Cheers Andy for clarifying that. I came across an interesting article written in Jan 08 - http://www.myfinances.co.uk/news/mortgages/tracker-mortgage/tracker-or-fixed-rate-mortgage-dilemma-$484173.htm

But will mortgages stick at 4,5% or lower (if it happens - and if so, for how long that is the question!)

BoE Trackers do seem to be a value bet, but a gamble none the less.

_Andy_

It's a gamble either way! such is the fun of the mortgage world!

Cash-Is-King

I am going to batten down the hatches! I reckon it will be six of one, half a dozen of another over the 5 year term. The dice have been rolled!

My main Q now is RE the repayment part of the mortgage. Do I stick this £280 p/m in the FD account or is it smarter to stick it in a repayment vehicle, and if so does anybody know of a good performing 'repayment vehicle'?