Remortgage now or hold out a bit longer for a better deal?

Lemoncurd

Our offer period ended in July and the mortgage is now on a tracker at 0.99% above the base rate for the term of the mortgage. At the time I researched online and spoke to L&C and couldn't find a good enough deal for it to be worth changing. The lender could only offer us fixed rates at about 6.5% and then going up to an SVR of 7.29% once the fixed term was up.

The lender has just phoned my husband to offer a fix of 5.79% for two years going up to 6.1% variable, he asked if that was a tracker and they said "yes 1.1% above base rate". The fees are £699 which at the current rates would take about a year of payments to make up, we do not know yet whether we'd still have to pay an exit fee to switch products with the same lender.

I admit I haven't yet done much research on what else is available now but was wondering if this was a reasonable deal at the moment? More importantly is it going to be worth changing to?. My instinct is that we wouldn't save a huge amount over the 2 years (unless interest rates rise a few times) and we'd be gambling on the mortgage market having improved quite a bit in 2 years time so it might be better to wait.

We are looking at just under 60% LTV. I have just been made redundant, my employment will end in mid Oct and I will not be looking for another job as we're expecting a baby in Jan. Don't expect to start a new job before Jan 2010 (if at all). This means we'll be relying solely on my husbands salary which means we now need to borrow over 3 times salary, around 3.4X, I guess this will restrict our choice of products a bit more than before?

Jonbvn

TBH, in your situation I would remain on the tracker. IMHO rates will drop later this year, and it may then be worth considering a longer term fix then.

dimbo61

(" I have just been made redundant " and you are pregnant ?)
Have you told your employer you are expecting ?
Did you ask for redundancy ?
Think long term and look for a 5 or even 10 year fix to safeguard your mortgage payments while you are home enjoying ! time with your child/children.
Ask your existing lender for a fee free fixed rate deal or you will take your custom elsewhere GOOD LUCK

Leon_W

Yep. I'd go with Jonbvn on this one.

Swap rates have been falling so therefore I've been getting lots of lender updates with fixed rate reductions. 0.99% above base is good so I would think very carefully before jumping ship as there is pressure to cut BOE base rate, not increase it.

You shouldn't have any problem income wise with that LTV either.

Best of luck with the baby !

Lemoncurd

It's funny, I have now just had a random call from our bank (one of the UK's biggest mortgage lenders). They noticed our mortgage payment had gone up and wanted to see if they could offer a better deal. They couldn't and said that we were very lucky having such a good deal and we should stick with it!

dimbo61 wrote: »

(" I have just been made redundant " and you are pregnant ?)
Have you told your employer you are expecting ?
Did you ask for redundancy ?

Ask your existing lender for a fee free fixed rate deal or you will take your custom elsewhere GOOD LUCK

I told them at the beginning of the redundancy consultation period (fairly early days then). I didn't choose redundancy but am happy with it, everything was above board and they have treated me well, just a bit scary knowing that there is no job waiting after maternity leave if I wanted it! I only mentioned it because I thought only having the one earner in the house might affect our chances of getting a good deal with a different mortgage provider.

I don't really have much room for negotiation with the current lender as so far haven't come up with any better deals than their 2 yr 5.79% elsewhere (well none that it is worth moving to once fees are taken into account) so I don't reckon they would waive fees if I threatened to leave.

Toughluck

Accord are bringing out a 5.19% 2 yr fixed rate in the morning with a 1.5% fee (min loan size £100K I would have thought.) abbey also bringing out rates tomorrow.

Just because you had a call from "one of the countrys biggest banks" does not mean they have good products so please move away from that arena; there may be better for you if you look hard enough away from high street lending.


"""I don't really have much room for negotiation with the current lender as so far haven't come up with any better deals than their 2 yr 5.79% elsewhere (well none that it is worth moving to once fees are taken into account) so I don't reckon they would waive fees if I threatened to leave.""

Of course your current lender is not going to waive fees to keep you!!! Unless your with Nationwide anyway. They want new business.

Lemoncurd

Toughluck, completely agree with you on both points, don't worry! Thanks for the tip on Accord, will look it up.