Can I have a 5 year fixed rate mortgage?
Posted by admin | Under Fixed Rate Mortgage Friday Nov 7, 2008I have 3 years left on my repayment mortgage - can I remortagge now on a 5 year product? - what happens when I get to year 3 and my mortgage is repaid?. I have asked the Nationwide but the adviser does not know> In theory I will have a 3% penalty - but my argument is 3% of nothing is nothing
What are your thoughts
When you tie in to a fixed rate for however long you can leave the rate but there will be financial penalties, these will be in letter from the inital company you took the loan out with on the Nationwide site it states the following.
Early repayment charges for fixed rate and tracker mortgages
If you repay the loan or make an overpayment of more than £500 per month within the initial fixed or tracker term, within the first 5 years of a Lifetime tracker, or within the first 10 years of the 25 year fixed rate, an early repayment charge will be payable on the entire overpayment amount. The percentage charge payable is detailed in the table below.
Deal Term Percentage Payable
2 years 1.5%
3 years 2.0%
5 years 3.0%
10 years 3.0%
Redemption charge
If you enter into a new mortgage with Nationwide and subsequently repay your mortgage more than ten years before the natural term, you will pay a charge (currently £90) unless you are taking a new Nationwide mortgage at the same time.
25 years 3.0%
Lifetime 3.0%
I suggest that you get this clarified as the financial penalty will be a nasty sting if you are not anticipating it, at present , Building Societies can pick and chose who to offer a mortgage to, if you dont want the product on offer you may find it hard to find another as deals are being withdrawn daily.
With interest rates falling I would not tie in.
If you look around you can get a 10 year fixed rate!
References :
You can get a mortgage for any term the lender will give you - there's no law on minimum length. (Bridge loans can be written for a period of a few months.) Shorter terms will bring the fixed rate closer to the adjustable rate (since the risk to the lender is lower).
If you prepay when there's a balance, the penalty applies (either to the original amount or to the balance - read your loan documents). If you refinance the mortgage with the same lender, the prepayment penalty usually doesn't apply (again, read your loan documents).
If your current mortgage is with Nationwide, and the Nationwide rep can't answer your question, ask to be put through to someone who can.
References :
When you tie in to a fixed rate for however long you can leave the rate but there will be financial penalties, these will be in letter from the inital company you took the loan out with on the Nationwide site it states the following.
Early repayment charges for fixed rate and tracker mortgages
If you repay the loan or make an overpayment of more than £500 per month within the initial fixed or tracker term, within the first 5 years of a Lifetime tracker, or within the first 10 years of the 25 year fixed rate, an early repayment charge will be payable on the entire overpayment amount. The percentage charge payable is detailed in the table below.
Deal Term Percentage Payable
2 years 1.5%
3 years 2.0%
5 years 3.0%
10 years 3.0%
Redemption charge
If you enter into a new mortgage with Nationwide and subsequently repay your mortgage more than ten years before the natural term, you will pay a charge (currently £90) unless you are taking a new Nationwide mortgage at the same time.
25 years 3.0%
Lifetime 3.0%
I suggest that you get this clarified as the financial penalty will be a nasty sting if you are not anticipating it, at present , Building Societies can pick and chose who to offer a mortgage to, if you dont want the product on offer you may find it hard to find another as deals are being withdrawn daily.
With interest rates falling I would not tie in.
References :
http://www.nationwide.co.uk/mortgage/remortgage/fees.htm
Go to your local bank and ask for a home equity loan to pay of your mortgage. They have 3,5,7,10 etc.
Best part, not fees usually.
Mike
References :
http://www.alliedhomemortgagepa.net