Is it still sensible to sit tight?

by paul65 19 June 2011 |

2 comments | Love

Love 0 loves

Hello

I have asked for advice on this issue in the past and am still in the same position I was when my mortgage deal ended in October 2009, i.e. I am with Nationwide and am currently paying their BMR of 2.5% - it is guaranteed not to be more than 2% above the Bank of England BMR.

There is £114k outstanding and I have 19 years left to go.

In the past it seemed that the deals offered by Nationwide were the best available. They are currently offering customers in my position
2yr fixed at 3.49% with a £999 fee,
2yr Fixed at 3.89% with no fee,
3yr Fixed at 3.69% with a £999 fee,
3yr Fixed at 3.99% with no fee,
5yr Fixed at 4.29% with a £999 fee or
5yr Fixed at 4.49% with no fee.

All offer £300 cashback plus another £100 if I use the online mortgage switching facility.

I currently overpay my monthly mortgage by 30%. The question is should I continue to do this or is it time to move to a fixed rate?

Any advice greatly appreciated.

Thanks

Report

Comments (2)

824

MikeGG1 posted
It is crystal ball time again and no-one can really predict what the MPC will decide to do. I guess that they are relying on the VAT rise working its way out of the figures next year.

However, I can't see any advantage in switching to a 2 or 3 year deal. The rates are likely to be up by the time they would expire and meanwhile they would cost you more.

That leaves the 5 year deal of which the fixed fee is marginally the cheaper for you. There are so many external factors involved that make it impossible to know with any degree of certainty which leans me in the direction of sitting tight on your current deal so long as you can continue to overpay.

Mike
Posted on 20 June 2011 | Love 0 loves Report
4

emma posted
If you work out what your payments would be at those different rates and then factor in how much you will be overpaying. Then have a think about how quickly you think the BoE base rate will go up when it goes up. If you think it will go up by 1.5 points over the next two years then you be on even stevens anyway with that first deal - if you think it will go up by more than that and you wont be able to afford the extra payments whilst you get/ wait for a better deal then you should go early. Oh and dont forget the dreaded fee, how many months payments is that worth to you? our calculators could help you answer some of these questions. Try this one to start with http://www.lovemoney.com/mortgages/mortgage-calculator/remortgage.aspx

Hope that helps
Posted on 20 June 2011 | Love 0 loves Report

Is it still sensible to sit tight?

Enjoyed this? Show it some love

Comments (2)

Post an answer

Something you're dying to ask... or answer?

Sign in for a better Q&A