Re-mortgage before i move, in 2 years time

bengee1977

Hey,

I currently have a mortgage with the Halifax with £43,000 outstanding balance. I'm currently on 6.04% (+1.04% base rate) but this is due to go to the SVR of 7% in less than 2 months time. I shall eventually be wanting to move my mortgage to a cheaper bank (HSBC currently for me).

That is not possible at the moment though, because i have a couple of defaults (both satisfied) on my credit report from 4 years ago, so they are due to be removed in 2 years time automatically. So i'm stuck with the Halifax for another 2 years!

I have a choice. I can either go to a better deal with the Halifax at rate 6.39% (+1.39% base rate) and a product fee of £749. *OR* Stay on their 7% SVR rate, obviously i don't have to pay any product fee here

A difference of 0.61% doesn't sound much, especially seeing as i'll be pay £749, which will be added to the mortgage!!

Is it worth it? At first look i'm thinking, maybe not. But then, if i take the new deal, i'll be paying 0.61% *LESS* for the next 2 years on the full amount of the mortgage (currently £43,000, remember!)

I'm sure the banks all do this because most people can't be bothered with all the hassle, but if i can save some money, i will do. Any advice appreciated! :rotfl:

Thanks

mshaw77

Hi, As you have got such a small mortgage itis probably not worth paying the fee, it is hard to work out because you have not listed the number of years in total left on your mortgage? However just to give you an example a repayment mortgage over 10 years. On the SVR of 7% you would pay 499.27pm over 24 months would work out at =11982.48 6.39% fee added to loan =£494.32pm over 24months = £11863.68 so you would save £118.80 by paying the fee however you will be charged far more interest over the length of the mortgage because you have added the fee to the loan. So is it truely worth it? Another example to see if it truely pays £43000 pay £749 upfront = 485.85p pm over 24 months =£11660.40p plus the original 749=12409.40p so you would be £426.92p worse off by paying for the halifax product. Thing is I am a mortgage broker and I have a few clients in your situation, you should not have too much of a challenge moving away from Halifax in two months. As long as you have had no adverse credit since you should have a good credit score. I hope this helps Michelle