Once your mortgage has come to the end of its deal period, you'll be placed onto the current standard variable rate (SVR) as a Nationwide Building Society member. Nationwide calls this their Standard Mortgage Rate (SMR).
With Nationwide, there are no direct SVR-type mortgages you can currently take out, as the initial rates offered are either fixed or under a tracker-type product.
The current standard variable rate (SVR) for Nationwide Building Society Mortgages is 7.99% which is lower than the industry average and 2.74% above the BOE base rate.
Mortgages reserved before 29th April 2009 revert to the Base Mortgage Rate (BMR) and subsequent mortgage reservations revert to the Standard Mortgage Rate (SMR). The BMR is currently 6.75% which is 1.50% above the BOE base rate.
The BMR is guaranteed not to be higher than 2% above the Bank of England Base rate. However, if you move your mortgage now, you're placed on the SMR, which has no upper limit or lower cap.
If you're currently on the BMR and thinking of moving your mortgage loan for whatever reason, then it would be worth taking professional advice on this matter. Once you've moved from the current BMR to a new product, it's not possible to switch back at a later date. That decision could cost you thousands in increased interest payments.
Although an initial tracker or fixed mortgage interest rate may sound enticing, it's the standard variable rate you are placed on afterwards that's most important. Every mortgage reverts to this rate after the introductory period.
If your circumstances change from when you take out a product to when it gets renewed several years later, you may not be able to get similar terms. For example, if you lose your job, have children, general inflation increases, or your partner no longer has an income.
That's why lenders publish an APR because this takes into account the initial discounted rate and the SVR for the entire mortgage loan term.
While the initial rates offered by Nationwide Building Society are some of the best deals in the industry and marketplace, you should consider all fees that most lenders charge. In addition, there may be early repayment penalties if you decide to pay off your loan or have to move house.
With so many products on the market, choosing the lowest headline rate is the easiest option. But once you've added in arrangement fees and any additional charges, the rates offered by all companies, including Nationwide, may push up the total cost of the mortgage. Therefore it may be prudent to use a comparison website or broker and certainly to get professional advice to help your decision-making process.
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