Changing mortgage deal

Brendgun · 20 February 2018 at 8:44PM

I am currently coming to the end of my 5 year fixed repayment mortgage deal @ 3.29%, I have found a 2 year fixed repayment mortgage deal @1.99% as the interest rate is a bit lower I was expecting the monthly repayments to be lower, but they have stayed the same is this right or am I missing something.

amnblog · 21 February 2018 at 9:36AM

The same, no - very similar possibly.

If you remaining balance is very small, or you have a short term to go, or both, the interest change makes minimal difference to your payments as most of your payment is repaying capital not servicing interest.

Mortgage_Adviser · 21 February 2018 at 10:38AM

As above. What is the mortgage term outstanding and what is the balance?

Brendgun · 21 February 2018 at 11:24AM

Thanks for the help, I am currently paying £609 a month at 3.29% I have £24100 left to pay which works out to 3 years 5 months left. My new deal is the same balance and term but at 1.99% and the monthly payment is now £609.28 does this sound right? I have changed deals in the past for a lower rate and my monthly payments have always gone down although the balance was a lot higher then.

Mortgage_Adviser · 21 February 2018 at 11:35AM

Wehn the mortgage term left is very small like in your case, the absolute majority of your monthlyu payment goes towards reducing thr capital rather than the interest payment to the bank.. I woul say that of £600 you pay every month the bank only keeps £30 or so. So if you cut your interest by a third your mortgage would only go down by £10 per month.
In this situation when remortgaging it is never good idea to pay any fees and alway best to go for the best fee -free deal you can find. It is also normally the best to stay with the same lender to avoid any other costs eg solicitors and brokers

Are there any arrangement fees that are being added to the mortgage?

Brendgun · 21 February 2018 at 12:24PM

Thanks again for the reply, no there is no fees involved.

getmore4less · 21 February 2018 at 1:27PM

Brendgun wrote: »

Thanks for the help, I am currently paying £609 a month at 3.29% I have £24100 left to pay which works out to 3 years 5 months left. My new deal is the same balance and term but at 1.99% and the monthly payment is now £609.28 does this sound right? I have changed deals in the past for a lower rate and my monthly payments have always gone down although the balance was a lot higher then.

£24,100 @ 3.29% £609pm 3y 6m last payment around £577

for same term and last payment @ 1.99 the payment would be

£24,100 @ 1.99% £595pm

£609pm would be

£24,100 @ 1.99% £609pm 3y 5m last payment £576.

You are in the range where the exact timing of the switch and term could account for the difference as this is very close to one month.

Brendgun · 21 February 2018 at 5:31PM

Thanks a lot for the help it has cleared things up for me

Changing mortgage deal

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