My remortgage offer from Abbey - should I take it? Advice please!

Seaxwyn · 2 April 2008 at 12:14PM

Hi there, I would really appreciate some advice and/or views.

We have a mortgage with Abbey, £150,942 outstanding (currently paying interest only) and the fixed rate ends in June.

I've discussed options with Abbey and they have offered a fixed rate of 5.75% for 5 or 7 years. With a £125 set up fee. We could overpay up to 10% of the balance each year without penalty.

Or a flexi/offset type account at 0.59% above the BoE rate - with an arrangement fee of £995.

The woman said the rates are changing tomorrow so she urged me to sign up today. Is this likely to be true or just a hard sell tactic?

I'm inclined to go for the fixed rate for 5 years. That would mean no increase for the period while we are also paying a large loan, after which I hope we can pay the mortgage faster.

I haven't shopped around, but am not too confident we'd even get accepted by another lender as we are both self-employed, my husband is 58, and have a lot of other debt - although our credit records are good with no missed payments etc.

Please could someone advise whether the Abbey deal looks worth accepting or whether I should wait and/or shop around.

Thanks!

Viks · 2 April 2008 at 12:18PM

I am in the process of getting a mortgage also but with another lender and yesterday he told me the rates are changing soon so he wanted to get the paperwork through soon.

beecher · 2 April 2008 at 12:26PM

The advice on here seems to be that if you find a deal, don't wait around too long as it'll be gone soon. Sounds an okay enough deal, particularly as you're not sure you'd be able to move - and they probably are changed their rates soon so I'd go for it!

jill2002 · 2 April 2008 at 12:39PM

I would doubt that you could get a better deal elsewhere - particularly with the low booking fee. I would suggest that you accept the deal - you will still get a 14 day cooling off period - make sure you add the fee to the deal - so if you find something better and 'cool off' within the 14 day period, you will not lose the fee. You can always pay the fee after the changeover (if you choose to) by sending a cheque to the mortgage centre explaining that it is to pay the product fee and they will accept it as a capital repayment, therefore you will not get charged extra interest on this amount. (Normally the minimum capital repayment is £500 unless you state that it is to pay the product fee).

Bismarck · 2 April 2008 at 12:50PM

Hi Seaxwyn...followed your post from CC board as I'm trying t oavoid work (self-employed)....you're welcome re the advice earlier! As a person sitting on a mini-mountain of low rate LOB card debt, I'm quite the advocate!

I'd personally be conservative and get the 7 year deal n the hunch that interest rates in 5 years time could not be pretty. Our 5 year deal came to an end in 2006 and I ummed and ahhhd between 2, 5 and 10 years and picked 10 years for peace of mind.....do wonder if there could be a permanent shift in mortgage availability and a return to 10% + rates by 5 years time...we've already pretty much seen that the Fed & Bank of England rates are now pretty much meaningless for some when it comes to getting a mortgage. Chilling thought but I think we've come to the end of credit & debt as we once knew it...

Bismarck · 2 April 2008 at 12:51PM

Also, would suggest getting it done now as you never know which will be plugged next or for what reason.

Seaxwyn · 2 April 2008 at 1:03PM

Thanks everyone. I will accept the Abbey deal - and am really relieved not to have to start applying elsewhere.

Bismarck - sounds like we have lots in common - self-employed, mountain of low rate LOB debt... and a habit of reading these boards when we should be working!

JimmyTheWig · 2 April 2008 at 1:14PM

I'd say take the 5 year fix from Abbey, but that's just a hunch.

Bismarck · 2 April 2008 at 1:32PM

Hi Seaxwyn...yeah, it's a kind of odd precarious existence where you try and earn and save at the same time but with little certainty of either.

Looking at your situation again, maybe self-employed may not be a great thing to be putting on new applications at the moment. Please don't post again til you've done your deal!! You know it makes sense...

Seaxwyn · 2 April 2008 at 1:36PM

Deal will be done at 3.45 - that's when she's ringing back.

I'm going for the 5 yr fix rather than 7 yr - I appreciate your wisdom but a lot will be changed for us by then - a couple of loans paid off and possibly 2 kids left home. So it's a natural time for a change anyway.

Only thing still troubling me (but in a nice way) is... shall I use some of my savings to take the mortgage down to a round £150k? Feels neater somehow, and would still leave us £750 savings for emergencies.

JimmyTheWig · 2 April 2008 at 1:44PM

Do you and your wife (?) both pay tax?
Have you both maxed out your cash ISA limits?

If the answer to either of these is no then don't reduce the mortgage. That money can make you more than 5.75% in savings.
If things change and you can't earn more than 5.75% in savings then you can use it as an overpayment then.

My remortgage offer from Abbey - should I take it? Advice please!

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