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  • FIRST POST
    • OXFORD_SMOGGY
    • By OXFORD_SMOGGY 1st Jun 17, 1:10 PM
    • 570Posts
    • 119Thanks
    OXFORD_SMOGGY
    Remortgage Calculation help
    • #1
    • 1st Jun 17, 1:10 PM
    Remortgage Calculation help 1st Jun 17 at 1:10 PM
    I had an initial £315,000 25 year mortgage
    We signed up for a 2 year fix @ 3.29% interest which expires (last payment 01/08/2017, 1 payment left)
    We pay £1542 a month.

    We paid an ERC payment to leave our mortgage of £459 pound (paid immediately) and a booking fee of £749 (added to mortgage)

    Our new 2 year fix is 1.19% and expires on 30/09/2019 keeping same rate of payment.
    Our new repayments are £1240 a month.

    Our remaining debt is £301,078 (including £749 booking fee added on)

    I'm struggling to work out exactly how much we save, put crudely it looks like we've paid £459 but will only save £300 on the final monthly repayment, so net we are -£159 down!

    I went through this before with someone and calculated myself but now it seems like I've made the wrong choice so want to get a 2nd opinion.
    Printing money since 2008
Page 1
    • OXFORD_SMOGGY
    • By OXFORD_SMOGGY 1st Jun 17, 1:44 PM
    • 570 Posts
    • 119 Thanks
    OXFORD_SMOGGY
    • #2
    • 1st Jun 17, 1:44 PM
    • #2
    • 1st Jun 17, 1:44 PM
    If I had left my fix to run out the debt would have been £298,202 after 2 years according to the MSE tool. No tool can help me out due to the limitations and I need to work it out all exactly as so close to the bone. Any help would be appreciated.
    Printing money since 2008
    • clairebeth
    • By clairebeth 1st Jun 17, 4:38 PM
    • 92 Posts
    • 22 Thanks
    clairebeth
    • #3
    • 1st Jun 17, 4:38 PM
    • #3
    • 1st Jun 17, 4:38 PM
    Here is a spreadsheet you can use to compare mortgages:
    http://locostfireblade.co.uk/spreadsheet/Index.html

    I think getmore4less might be along soon to show us his fabulous maths, but, my basic calculations are:

    301,078 @ 1.19% divided by 12 months is £298.56 interest in the final month.

    300,329 @ 3.29% divided by 12 months is £823.40 interest in the final month.

    £823.40 - £459 = £364

    So, I THINK you're £66 better off switching now than waiting until August.

    That's a very low ERC for that size of mortgage?
    • getmore4less
    • By getmore4less 1st Jun 17, 8:16 PM
    • 28,782 Posts
    • 17,215 Thanks
    getmore4less
    • #4
    • 1st Jun 17, 8:16 PM
    • #4
    • 1st Jun 17, 8:16 PM
    I think getmore4less might be along soon to show us his fabulous maths, but, my basic calculations are:
    Originally posted by clairebeth
    been there already.

    http://forums.moneysavingexpert.com/showthread.php?p=72624576#post72624576
    • OXFORD_SMOGGY
    • By OXFORD_SMOGGY 2nd Jun 17, 12:17 AM
    • 570 Posts
    • 119 Thanks
    OXFORD_SMOGGY
    • #5
    • 2nd Jun 17, 12:17 AM
    • #5
    • 2nd Jun 17, 12:17 AM
    Yeah we did I need a fresh approach but appreciate the advice I received.

    Where is the 300,329 from Claire?
    Printing money since 2008
    • OXFORD_SMOGGY
    • By OXFORD_SMOGGY 2nd Jun 17, 12:20 AM
    • 570 Posts
    • 119 Thanks
    OXFORD_SMOGGY
    • #6
    • 2nd Jun 17, 12:20 AM
    • #6
    • 2nd Jun 17, 12:20 AM
    ah removed booking fee, great that is a really simple way of looking at it thanks, we went round the world before with it!
    Printing money since 2008
    • getmore4less
    • By getmore4less 2nd Jun 17, 6:09 AM
    • 28,782 Posts
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    getmore4less
    • #7
    • 2nd Jun 17, 6:09 AM
    • #7
    • 2nd Jun 17, 6:09 AM
    There is more than one months worth of interest getting saved.

    If you just want to know if you saved that approximation works, if you care about the amount when looking at short periods you need to go to days.
    • OXFORD_SMOGGY
    • By OXFORD_SMOGGY 2nd Jun 17, 8:07 AM
    • 570 Posts
    • 119 Thanks
    OXFORD_SMOGGY
    • #8
    • 2nd Jun 17, 8:07 AM
    • #8
    • 2nd Jun 17, 8:07 AM
    There actually isnt now as after all the sign up process the lender decided o change the interest rate on same day as our 2nd last payment.

    We made a mistake before as we were coming out with £400 and £800 savings etc, new it must be much closer and smaller than that, that was what was confusing.
    Printing money since 2008
    • getmore4less
    • By getmore4less 2nd Jun 17, 8:50 AM
    • 28,782 Posts
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    getmore4less
    • #9
    • 2nd Jun 17, 8:50 AM
    • #9
    • 2nd Jun 17, 8:50 AM
    If it has already(2 June now) changed then it is more like around 2 months till the 1 Aug when the old rate would have finished.

    simple calc that IS close enough is £300k * ( 0.0329- 0.0119 ) * 2/12 minus the ERC.

    £1050-459 = £590.
    Last edited by getmore4less; 02-06-2017 at 9:01 AM.
    • clairebeth
    • By clairebeth 3rd Jun 17, 4:04 PM
    • 92 Posts
    • 22 Thanks
    clairebeth
    Yep, if it's two months my calculation would work out about £590 as well.
    • OXFORD_SMOGGY
    • By OXFORD_SMOGGY 11th Jun 17, 1:58 AM
    • 570 Posts
    • 119 Thanks
    OXFORD_SMOGGY
    because it took so long though we only have one payment left on 1st of July, our normal payment came out for £1542 on the 1st of June, so I guess saving will be about half of that £300 ish?
    Printing money since 2008
    • getmore4less
    • By getmore4less 11th Jun 17, 6:50 AM
    • 28,782 Posts
    • 17,215 Thanks
    getmore4less
    Forget how may payments(that ship sailed months ago) it is the exact time on the differences in rates that determines how much you saved, .

    Your payment(£1500 mostly interest) makes a tiny difference to the calculation when you have a debt of £300k

    difference on rate £300k for the number of days will get the answer close enough.

    By using payment count if you switch just before or just after a payment there would be a big difference in saving when it should only be the interest on 1 or 2 days.

    There actually isnt now as after all the sign up process the lender decided o change the interest rate on same day as our 2nd last payment.
    you had 2 payments anyway.

    but you have forgotten to take account of payment at start of month and end of month that also makes a difference(tiny)

    simple calc that IS close enough is £300k * ( 0.0329- 0.0119 ) * 2/12 minus the ERC.

    £1050-459 = £590.
    • OXFORD_SMOGGY
    • By OXFORD_SMOGGY 19th Jun 17, 8:49 AM
    • 570 Posts
    • 119 Thanks
    OXFORD_SMOGGY
    Yeah ok thats ok then that ive saved a little, so the 2nd last payment was same as all the others, the only payment I benefit from will be the last whcih reduces to £1250 from £1550
    Printing money since 2008
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