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    • boiler-questions
    • By boiler-questions 9th Oct 16, 6:21 PM
    • 18Posts
    • 1Thanks
    boiler-questions
    Need to change mortgage quickly
    • #1
    • 9th Oct 16, 6:21 PM
    Need to change mortgage quickly 9th Oct 16 at 6:21 PM
    I've realised for a while now that I am paying over the odds for our mortgage but just haven't had the time/effort to change it.

    I quickly need to change to a new mortgage which would save me loads.

    I'm paying about 4% at the moment on a one account. The one account has been excellent for its flexibility but I don't need that as much now.

    Our LTV is below 50% so I'm hoping we should be able to get a good rate.

    I'm thinking that as I'm used to the buffer of the mortgage we've had, I could either do with a flexible mortgage or to take out more mortgage and put the rest into an easy access savings account just in case?

    House is worth around 200k, mortgage is currently about 89k but we could do with taking the mortgage out for maybe 100k and put the 11k into ISAs or similar between me and my wife?

    What do we need to start to get togther to swap mortgages?

    Any ideas on what the best for us would be?

    Is it worth going direct or is it better to go through a broker?

    Thanks
Page 1
    • AnotherJoe
    • By AnotherJoe 9th Oct 16, 7:52 PM
    • 4,201 Posts
    • 4,218 Thanks
    AnotherJoe
    • #2
    • 9th Oct 16, 7:52 PM
    • #2
    • 9th Oct 16, 7:52 PM

    House is worth around 200k, mortgage is currently about 89k but we could do with taking the mortgage out for maybe 100k and put the 11k into ISAs or similar between me and my wife?
    Originally posted by boiler-questions
    Why? Whats so special about having the £11k (thats a suspiciously round £100k you've arrived at there) and why "in ISAs or similar"? What will that achieve for you?

    Why not just remortgage to a lower rate and then save and/or overpay?
    • muhandis
    • By muhandis 9th Oct 16, 8:21 PM
    • 231 Posts
    • 87 Thanks
    muhandis
    • #3
    • 9th Oct 16, 8:21 PM
    • #3
    • 9th Oct 16, 8:21 PM
    From your post it looks like you want to re-mortgage to a lower rate but also have a cash buffer that you can access if need be.

    Given that you have such a low LTV <50%, in your place I would opt for the second option that you mention below. Up my LTV while re-mortgaging, release some cash to serve as a buffer in a savings/current account with an interest rate equal to or higher than the mortgage (this shouldn't be too much of a faff for the amount of £11k you mention).

    However, whether you will end up "saving loads" or not will depend on the fees you incur when re-mortgaging.

    I would definitely recommend talking to a broker who can discuss the personal circumstances of your case and give you some realistic re-mortgage options that are open to you.

    Good luck.

    I've realised for a while now that I am paying over the odds for our mortgage but just haven't had the time/effort to change it.

    I quickly need to change to a new mortgage which would save me loads.

    I'm paying about 4% at the moment on a one account. The one account has been excellent for its flexibility but I don't need that as much now.

    Our LTV is below 50% so I'm hoping we should be able to get a good rate.

    I'm thinking that as I'm used to the buffer of the mortgage we've had, I could either do with a flexible mortgage or to take out more mortgage and put the rest into an easy access savings account just in case?

    House is worth around 200k, mortgage is currently about 89k but we could do with taking the mortgage out for maybe 100k and put the 11k into ISAs or similar between me and my wife?

    What do we need to start to get togther to swap mortgages?

    Any ideas on what the best for us would be?

    Is it worth going direct or is it better to go through a broker?

    Thanks
    Originally posted by boiler-questions
    • ACG
    • By ACG 9th Oct 16, 8:46 PM
    • 13,500 Posts
    • 6,648 Thanks
    ACG
    • #4
    • 9th Oct 16, 8:46 PM
    • #4
    • 9th Oct 16, 8:46 PM
    A mortgage of sub 2% should be achievable. There willbe offset mortgages at that kind of rate available.

    You willneed:
    3months bank statements,
    3 months payslips,
    Proof of ID and address.

    You can either apply directly or through a broker.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, 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.
    • sotal
    • By sotal 9th Oct 16, 9:45 PM
    • 5 Posts
    • 1 Thanks
    sotal
    • #5
    • 9th Oct 16, 9:45 PM
    • #5
    • 9th Oct 16, 9:45 PM
    Thanks for the answers (I'm the original poster but can't find my normal login details and when I reset the password I put in my email address and it was for this account which I must have registered too!)

    The 2nd reply summed it up nicely.

    I've had a one account for years and enjoyed the flexibility, I'm cautious enough not to abuse it.

    So yes basically I would like a nice cash buffer that I can access when that unexpected bill comes in or when I want to buy something. Hopefully it wouldn't get used but would be there just in case. It doesn't have to be an ISA, wherever would get the most interest, but still provide access if I needed it.

    The 11k, was to round it up to 100k no other reason. Our current buffer is about 30k in the one account but I don't need it to be that much.

    I currently pay about £1000 per month off the mortgage, as that is what is left after the rest of our spend. The interest is something like £350, so I figured that if I halved the interest rate on a new mortgage then this would effectively get halved.

    So I should save around £175 per month? (£2100 per year). Even with a £1000 fee on a fixed 5 year deal, I should save around £9500. This is all from very quick working out so please correct me if I have made a huge error?

    I would probably just pay the same rather than having a saving so I would expect to pay it off sooner. Again from crude calculations I think I would pay off approx £50,000 after interest over the next 5 years. I then plan to finish the mortgage off over the following 5 years.

    If I proceed with the current mortgage and the same payments etc, then I should finish at the same time. However with the first method I should still have £11k in the savings account (Plus any interest from the 10 years)

    This assumes spending stays the same, wages stay the same, and that in bothe scenarios I don't spend the savings/buffer.

    So I do think I should be at least £10k better off by changing mortgage maybe even more?
    • getmore4less
    • By getmore4less 9th Oct 16, 9:46 PM
    • 26,307 Posts
    • 15,812 Thanks
    getmore4less
    • #6
    • 9th Oct 16, 9:46 PM
    • #6
    • 9th Oct 16, 9:46 PM
    As above you could just get one of the decent offsets around.
    non offset will be cheaper

    The warnings about one account being a poor option/choice have been around for years, probably been costing you £200+pm
    • minimike2
    • By minimike2 9th Oct 16, 10:03 PM
    • 1,724 Posts
    • 1,290 Thanks
    minimike2
    • #7
    • 9th Oct 16, 10:03 PM
    • #7
    • 9th Oct 16, 10:03 PM
    Borrowing extra to put into ISAs.

    1. As above, why.
    2. If you are looking for the best rates, the chances are the lender will not allow this as a purpose for borrowing.
    I am a mortgage industry professional. You should note that this site doesn't check my status as a Mortgage Adviser, 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
    • getmore4less
    • By getmore4less 9th Oct 16, 10:38 PM
    • 26,307 Posts
    • 15,812 Thanks
    getmore4less
    • #8
    • 9th Oct 16, 10:38 PM
    • #8
    • 9th Oct 16, 10:38 PM
    All the OP needs to do is take the money out of the account before the remortgage.
    • AnotherJoe
    • By AnotherJoe 9th Oct 16, 10:51 PM
    • 4,201 Posts
    • 4,218 Thanks
    AnotherJoe
    • #9
    • 9th Oct 16, 10:51 PM
    • #9
    • 9th Oct 16, 10:51 PM
    If you've got £30k in your offset why would you borrow another £11k?

    Or were you planning to fold that into reducing the mortage? But if you reduce your mortgage rate so much, then in a few months of saving, you'll quickly get a good sum put by so why borrow an extra £11k that you will pay interest on for the rest of the mortgage term? It's not as if you need it right now.

    And again, why would you put it an ISA ? Interest rates are terrible in those.
    • getmore4less
    • By getmore4less 9th Oct 16, 11:03 PM
    • 26,307 Posts
    • 15,812 Thanks
    getmore4less
    I read it as the plan is to take out 11k and remortgage the rest(100k) not take out the 30k and another 11k.
    • AnotherJoe
    • By AnotherJoe 10th Oct 16, 6:23 AM
    • 4,201 Posts
    • 4,218 Thanks
    AnotherJoe
    I read it as the plan is to take out 11k and remortgage the rest(100k) not take out the 30k and another 11k.
    Originally posted by getmore4less
    "The 11k, was to round it up to 100k no other reason. Our current buffer is about 30k in the one account but I don't need it to be that much.".
    Indeed but what about the £30k? OP said mortgage is £89k plus they have £30k in the offset so if they use the £30k that makes the mortgage £59k.
    Last edited by AnotherJoe; 10-10-2016 at 6:27 AM.
    • getmore4less
    • By getmore4less 10th Oct 16, 7:49 AM
    • 26,307 Posts
    • 15,812 Thanks
    getmore4less
    "The 11k, was to round it up to 100k no other reason. Our current buffer is about 30k in the one account but I don't need it to be that much.".
    Indeed but what about the £30k? OP said mortgage is £89k plus they have £30k in the offset so if they use the £30k that makes the mortgage £59k.
    Originally posted by AnotherJoe
    It's not an offset it is a One Account they work differently.

    I read the mortgage as £89k with a £30k buffer meaning they can increase debt back upto £119k in the One Account

    if it was the way you describe they would only need a new mortgage of £70k and still have £11k to put somewhere else

    perhaps OP could clarify...
    • getmore4less
    • By getmore4less 10th Oct 16, 8:03 AM
    • 26,307 Posts
    • 15,812 Thanks
    getmore4less
    throwing some numbers at the £100k and using a Barclays lifetime offset

    £100k @ 4% £1000pm 122 months £21,834 interest
    £100k @ 4% £1013pm 120 months £21,494 interest

    Barclays offset 2.29% £1500 fees
    £101.5k @ 2.29% £1000pm 113 months £11,426 interest
    £101.5k @ 2.29% £1013pm 112 months £11,258 interest

    Break even on the change is 6 months

    Other fees may apply and there are probably other options that will be better if the OP can live with a smaller flexible fund.
    • AnotherJoe
    • By AnotherJoe 10th Oct 16, 4:37 PM
    • 4,201 Posts
    • 4,218 Thanks
    AnotherJoe
    It's not an offset it is a One Account they work differently.

    I read the mortgage as £89k with a £30k buffer meaning they can increase debt back upto £119k in the One Account

    if it was the way you describe they would only need a new mortgage of £70k and still have £11k to put somewhere else

    perhaps OP could clarify...
    Originally posted by getmore4less
    That makes sense, thanks. I had an offset mortgage and thought the One Account was an offset and worked the same. Obviously, it isn't and doesn't.
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