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Cherubium

Nationwide Hpi - What Effect Do Their High Rates Have?

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I was vaguely looking at mortgage rates (been looking for a house for 2 years, but not yet seen THE one at THE price!)

I've always been a Nationwide customer, so thought I'd check out their rates.

They're not terrible, but they're a long way off best buy status, and they don't offer any kind of SVR or offset deals.

So as the Nationwide house price index is based on their approvals, could you argue that the canniest buyers would shop for the canniest mortgage deals and therefore not really be represented in this survey?

Also, is it reasonable to assume that the NW and Halifax indexes are going to fluctuate based on how competitive their market offer is at any given time?

I'm not saying that this is what is happening, I'm just curious to know what everyone things about this theory.

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Nationwide is representative of it's market share, which is 5%, at such a low share i'm amazed it's survey carries so much weight still.

Looking at the 5% who choose Nationwide for their mortgage, if the rate offered is not the best then surely it must be because they can't get another mortgage offer but Nationwide are hardly subprime lenders, so the customers must be stupid.

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I had a mortgage with the nationwide - on at BOE+0.04% - low set up fees etc... that was at the start of 2006.

In 2008 I looked to remortgage and the rates were poor.

I went (stupdidly, but didn't know at the time) for a fixed rate offset account with First Direct at 5.25%.

Now, I've recently remortgaged with First Direct on lifetime rate of BOE+2.09%, again offset.

Nationwide offer a 2-year variable rate mortgage at BOE+2.18% with a £900 fee. Then it goes to 3.99% SVR.

Not bad - but ultimately, it's a bit rubbish.

My mortgage is currentlt about £100 per month and that £900 fee is equivalent to 9 months of repayments - which you have to shell out every 2 years. I'll just stick with what I have until I get a better deal with FD at say BOE+1.5%. :)

For FTBers / Re-mortgages the key is to have a low LTV. If you don't have that, then you'll be paying much much more.

I'm glad I left the NW - FD offer a great facility and the off-set is great if you can control your cash.

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For FTBers / Re-mortgages the key is to have a low LTV. If you don't have that, then you'll be paying much much more.

...the message to FTBs is simple....don't.... :rolleyes:

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My latest mortgages:

99-01: 5.5% fix, base or thereabouts

01-03: 3.2% fix, 0.75% below base

03-05: 2.7% fix, 1.25% below base

05 - 08: 3.9% fix, 0.75% below base

So why would any first time buyer today fall for a 5% fix or even a tracker 3% above base? Its bananas

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Forgive me for my confusion.

I am a new poster to this site, but have been reading the posts on and off for a year now with great interest. There are many varied view points and I think anyone looking at the site may not agree with whats being said, but at least pause to think before they leap.

I have been looking for a house to live in as a home and recently had an offer accepted on a house. I decided I did not want the chore of reading clauses in mortgage offers regarding setup fees, over repayment and exit fees, so I went to an independant financial advisor who advised me on mortgages. I am a FTB with, on the house I am purchasing, 56% LTV (I believe I am using the term correctly, in that this is the amount of the purchase price I will be borrowing). According to the IFA this made available to me to some of the best deals on the market, of which Nationwide featured heavily. I opted for a 5 year fix with Nationwide at 4.5%

Now comes the confusion...

I made this choice because I have never been a financial risk taker, it's the way my parents raised me, never borrow money, save etc. I am borrowing a little over three times my salary, which as has been suggested on this forum should be the "affordable" amount allowed to be lent. I chose 5 year fix at a higher rate than a 2 year variable because I figured over 5 years they can not keep rates at their current low, maybe they can't even do this for 2... I came to this assumption from reading many of the posts, interpreting some of the points as making sense and that rates must rise. In fact I am seeing that banks are raising their rates, all be it by small amounts, despite the BOE rate remaining at 0.5%. I apologise if I am going on, but now I read this post and am interested in the forums thoughts, I will try to get to a question soon.

The OP questioned the effect on the Nationwide survey has as the "canniest buyer" would go elsewhere. There was also mention of a Nationwide 5% market share. Is this a 5% market share because people are still stuck in Northern Rock style mortgages because they can't go elsewhere? Did the IFA and the software he had access to not have the most current data available and Nationwide does not offer the lowest rate cheapest to arrange 5 year fix? Would, based on what I have read on this forum, it be safe to assume that rates must go up at some point? Would it also be safe to assume that the media and BOE can not forsee the future and in a self serving manner be mearly manipulating the current situation to their advantage when in fact it remains largely out of their control?

I guess I am asking how can one class themselves as prudent in this current uncertain climate and not go for a long fix? I might be mistaking the "canniest buyer" as requiring some kind of prudence to fit that description. Is it in fact prudent to know what your outgoings are for the next 5 years and paying for that security?

As I said earlier I am interested in and value forum members thoughts. I have found a home that I believe I can afford, suits me now and hopefully for the forseable future. Many things have been said about HPC and the devaluation of the pound, I am sure we will all be suprised by what happens. I can only thank everyone here for at least making me think about what I am doing, rightly or wrongly.

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Forgive me for my confusion.

I am a new poster to this site, but have been reading the posts on and off for a year now with great interest. There are many varied view points and I think anyone looking at the site may not agree with whats being said, but at least pause to think before they leap.

I have been looking for a house to live in as a home and recently had an offer accepted on a house. I decided I did not want the chore of reading clauses in mortgage offers regarding setup fees, over repayment and exit fees, so I went to an independant financial advisor who advised me on mortgages. I am a FTB with, on the house I am purchasing, 56% LTV (I believe I am using the term correctly, in that this is the amount of the purchase price I will be borrowing). According to the IFA this made available to me to some of the best deals on the market, of which Nationwide featured heavily. I opted for a 5 year fix with Nationwide at 4.5%

Now comes the confusion...

I made this choice because I have never been a financial risk taker, it's the way my parents raised me, never borrow money, save etc. I am borrowing a little over three times my salary, which as has been suggested on this forum should be the "affordable" amount allowed to be lent. I chose 5 year fix at a higher rate than a 2 year variable because I figured over 5 years they can not keep rates at their current low, maybe they can't even do this for 2... I came to this assumption from reading many of the posts, interpreting some of the points as making sense and that rates must rise. In fact I am seeing that banks are raising their rates, all be it by small amounts, despite the BOE rate remaining at 0.5%. I apologise if I am going on, but now I read this post and am interested in the forums thoughts, I will try to get to a question soon.

The OP questioned the effect on the Nationwide survey has as the "canniest buyer" would go elsewhere. There was also mention of a Nationwide 5% market share. Is this a 5% market share because people are still stuck in Northern Rock style mortgages because they can't go elsewhere? Did the IFA and the software he had access to not have the most current data available and Nationwide does not offer the lowest rate cheapest to arrange 5 year fix? Would, based on what I have read on this forum, it be safe to assume that rates must go up at some point? Would it also be safe to assume that the media and BOE can not forsee the future and in a self serving manner be mearly manipulating the current situation to their advantage when in fact it remains largely out of their control?

I guess I am asking how can one class themselves as prudent in this current uncertain climate and not go for a long fix? I might be mistaking the "canniest buyer" as requiring some kind of prudence to fit that description. Is it in fact prudent to know what your outgoings are for the next 5 years and paying for that security?

As I said earlier I am interested in and value forum members thoughts. I have found a home that I believe I can afford, suits me now and hopefully for the forseable future. Many things have been said about HPC and the devaluation of the pound, I am sure we will all be suprised by what happens. I can only thank everyone here for at least making me think about what I am doing, rightly or wrongly.

I reckon if you want a home and you're not overstretching yourself financially or planning to move in the near future, you shouldn't worry too much about the market. Most things that people buy depreciate, and I don't like this idea that someone is a 'muppet' or a 'fool' because they buy a home for themselves and their family that may go down in value.

Back to the nationwide thing. IFAs only sell products that are sold through IFAs. That may seem obvious, but if you're a bank offering a top deal, you don't need to sell through IFAs and pay them comission to attract customers.

A good example of this is First Direct, who've had some of the best mortgage deals going for ages but only sell direct.

IFAs main use is if you need a special deal. If you're a good borrower with half a brain, you'll do just as well to look at the best buy tables in your Sunday Paper.

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I reckon if you want a home and you're not overstretching yourself financially or planning to move in the near future, you shouldn't worry too much about the market. Most things that people buy depreciate, and I don't like this idea that someone is a 'muppet' or a 'fool' because they buy a home for themselves and their family that may go down in value.

Back to the nationwide thing. IFAs only sell products that are sold through IFAs. That may seem obvious, but if you're a bank offering a top deal, you don't need to sell through IFAs and pay them comission to attract customers.

A good example of this is First Direct, who've had some of the best mortgage deals going for ages but only sell direct.

IFAs main use is if you need a special deal. If you're a good borrower with half a brain, you'll do just as well to look at the best buy tables in your Sunday Paper.

What you say makes perfect sense. I guess we don't always see the obvious (it would seem I didn't) and a certain amount of propaganda from institutions and the media can easily cloud your judgement. Such as the supposed added value of an IFA.

There is a huge industry working against common sense when you buy a house, such as the Nationwide statistics etc. Telling you everything you "need" to know, it's hard to ignore. The sad truth is we have had it drumed into us to such a certain extent I doubt even further financial catastrophe would have anything more than a temporary effect on sentiment.

Thank you for your comment, it's never to late to learn and hopefully I will without making too many mistakes along the way.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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