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  • FIRST POST
    • confused_kid
    • By confused_kid 1st Dec 15, 10:02 PM
    • 47Posts
    • 34Thanks
    confused_kid
    Ditch the fix, even with early repayment charge
    • #1
    • 1st Dec 15, 10:02 PM
    Ditch the fix, even with early repayment charge 1st Dec 15 at 10:02 PM
    Hi all, thanks for taking time to read this,

    Our situation is that we moved into our place start of 2013 and took out a 5year fixed @5.19 % (ouch!!) over 35yr term. 240k mortgage, now we're in a position that we have some around 65% LTV (85% previously) and mortgage is now 199k (house value 315k)...unfortunately still in our fixed till end of 2017 however even with a ERC of 5k we'd still save based on rates today plus I haven't factored in the overpayments we are making today (1.2k p month mortgage with 100 p month over payment)...with new mortgage we'd reduce the term to match the continued 1300 p month, should make significant difference.

    My question is am I missing anything major in my crude assumptions above and secondly I hear of the tighter lending criteria now but does that apply to remortgaging with the same potential lender? My wife is currently on maternity therefore do lenders take the current situation into account and her statutory maternity income or her actual salary?

    Just trying to see whether its worth speaking to a lender to kick-off process or wait until my wife is back?

    Thanks for reading
Page 1
    • amnblog
    • By amnblog 1st Dec 15, 10:38 PM
    • 9,270 Posts
    • 3,570 Thanks
    amnblog
    • #2
    • 1st Dec 15, 10:38 PM
    • #2
    • 1st Dec 15, 10:38 PM
    A two year fix is liable to give you a savings based on the maths. You need a rate under 4% to make a saving and most two year fixes are currently under 2%.

    How the maternity leave is handled depends on how long before your wife returns to work, future childcare costs, and the Lender.

    A broker would be your best guide on this situation.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • pfryer
    • By pfryer 27th Aug 16, 1:34 PM
    • 1 Posts
    • 0 Thanks
    pfryer
    • #3
    • 27th Aug 16, 1:34 PM
    • #3
    • 27th Aug 16, 1:34 PM
    i have used the Ditch the Fix tool and provided the current APR rate of my fixed mortgage which has 3 years to run (4.3% APR) as requested. (The actual rate is only 3.24% however). The answer came back that I should ditch for a rate of 4.04% or less, which is easily achievable. But is this the APR figure again? or the lower percentage rate without all the charges? Does anyone know the answer? This really needs to be made clear.
    • confused_kid
    • By confused_kid 14th Mar 17, 2:03 PM
    • 47 Posts
    • 34 Thanks
    confused_kid
    • #4
    • 14th Mar 17, 2:03 PM
    • #4
    • 14th Mar 17, 2:03 PM
    Hello all, just an update to my original thread


    decided at the time that it was worth paying the early repayment fee and move to a 10year fixed and kept the payment the same but reduced the terms from 30-35years, to 20 years! just over a year into it now, and will now start looking to overpay and try to finish it off within the term (or maybe with 12 months of term completing)...just started a thread over in the mortgage free wannabe section here - http://forums.moneysavingexpert.com/showthread.php?t=5617830
    • strawberries1
    • By strawberries1 16th Mar 17, 12:47 AM
    • 554 Posts
    • 118 Thanks
    strawberries1
    • #5
    • 16th Mar 17, 12:47 AM
    • #5
    • 16th Mar 17, 12:47 AM
    Hello all, just an update to my original thread


    decided at the time that it was worth paying the early repayment fee and move to a 10year fixed and kept the payment the same but reduced the terms from 30-35years, to 20 years! just over a year into it now, and will now start looking to overpay and try to finish it off within the term (or maybe with 12 months of term completing)...just started a thread over in the mortgage free wannabe section here - http://forums.moneysavingexpert.com/showthread.php?t=5617830
    Originally posted by confused_kid
    OP, 10years is a mighty long time!
    I'm a FTB and about to make an application.
    Would you suggest 2yrs or 5? Why?
    Fixed or tracker? Why?

    Thank you.
    • tom2205
    • By tom2205 16th Mar 17, 8:23 AM
    • 39 Posts
    • 11 Thanks
    tom2205
    • #6
    • 16th Mar 17, 8:23 AM
    • #6
    • 16th Mar 17, 8:23 AM
    Some 10 year products out there are great products and gives you solid reassurance of long term security should anything happen.

    Strawberries1:

    It is all down to personal preference and your situation. The OP may be better off with a 10 year fixed based on their circumstances but a 2 year tracker mortgage could be best for you. It's different for everyone based on their individual situation.
    I am a Mortgage & Protection Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • strawberries1
    • By strawberries1 16th Mar 17, 2:38 PM
    • 554 Posts
    • 118 Thanks
    strawberries1
    • #7
    • 16th Mar 17, 2:38 PM
    • #7
    • 16th Mar 17, 2:38 PM
    Thanks Tom!
    I don't plan to sell this property for another 10years at least however I did say to him that as a late 30s female I hope to meet someone soon and will be open to relocating. I didn't think he'll base my mortgage decision on that and PAM!! he recommended 2yrs. Surely I could look into get consent to let if that happened??
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