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  • FIRST POST
    • hempinge2
    • By hempinge2 11th Feb 18, 9:10 AM
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    hempinge2
    New house purchase with 2 part mortgage
    • #1
    • 11th Feb 18, 9:10 AM
    New house purchase with 2 part mortgage 11th Feb 18 at 9:10 AM
    Hello!
    With the interest rate news last week I'm wondering whether the Scottish Widows mortgage that has been agreed, for a new house purchase likely to complete end of March 2018, is the best thing to do - I've only just realised this which is a bit late but not too late I hope.

    The new mortgage would be in two parts, the original part being moved to the new house is around 295k on a 1.54% fixed expiring November 2018 (1.2% repayment charge, 3.99% SVR when it expires), the new part of the mortgage is 77k at 2.01% fixed until March 2020 (3% repayment charge in first year). The house is valued at 485k. So I suppose I have a couple of questions, which I'll ask the broker that arranged it on Monday, but thought the MSE community would have some views too.

    1. Given the BoE has said base rate will possibly be around 1.2% by 2021, I'm keen to fix the large part of the mortgage for as long as possible, but is this even possible considering there is this second part and not being first charge on a property means this just can't happen?

    2. Will I not be able to shop around outside of Scottish Widows until the two parts synchronise, therefore having to suffer almost two years of being on the SVR for the large part of the mortgage, which would increase monthly repayments by about £300, and then of course long term fixes would presumably be a lot more expensive.

    2. I'm a freelance contractor with 1 years of accounts so I'm not sure how many lenders would entertain lending, or whether it would be worth it considering the early repayment charge on the original large part of the mortgage (around £3500 I think).

    Any advice gratefully received.
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