Some more of ur excellent Advice Please LOCOBLADE

atlantis187

My 2 year fix with RBS is coming to an end on the 31st Nov.

My outstanding balance at that time would be £148500.
I could possibly get this down to £140000 by paying a lump sum.
Last week estate egent from Blundells valued the property at around £175-£180 thousand.

RBS have offered me a 5 Year Fixed deal at 5.45% with £3499 fee making my monthly payment £974 with fee's chucked into the loan.

I rang London and Country brokers and the best deal they could find me was with a compnay called Accord part of Yorskhire Bank the deal is
5 year fixed at 5.89% with fee's of £999 making my monthly payments £960 with fee's added.

Or should I go with First Direct Offset Base Tracker with no fee's at 5.99% and if rates do go up can always switch to their 5 year fixed rate with them without penalties other than £600 booking & arrangement fees.
Plus also have BIG advantage of Offsetting monies from current and saving accounts.

What do you reckon would be the best deal in the long run?

Locoblade

LOL, Im not an pro by any stretch of the imagination so please don't give too much weight to my opinion on things as they may well be wrong and there's loads on here far more knowledgable than me, but I can give you some figures from my spreadsheet if they help, based on the £148500 figure....

The RBS one will leave you with around £132,950 to pay off after 5 years having paid about £970 a month, so £970*60=£58200 paid in.

The Accord one will leave you with around £131,600 to pay off after 5 years having paid about £990 a month, so £59400 paid in

The FD offset will leave you with around £130,450 capital and cost about £993 a month, so £59580 paid in, assuming of course the rates don't change (as its a tracker). This also assumes you have an average of £1k in your current account offsetting.

On the face of it I'd say the RBS and Accord offers are simlar overall, there's roughly £1350 more in capital left on the RBS one but you've paid about £1200 less over the 5 years. The FD one looks slightly better than the other two Id say, it has about £1k less capital left than the Accord one, but you've only paid an additional £300 or so on repayments.

There are lots of variables that these simplistic figures dont take into account though, not least interest rate changes on the tracker, so don't take it as anything more than a rough guide please

atlantis187

Thank you very much for that.

If i go with the First Direct 5 year fixed at 5.95% what figures would I get end of the 5year term with the fee's added onto it?

When I put figures into the calculator on the first direct website where is says offsetting by if I put a large amount down say £10000 the monthly payments go down does this also mean my mortgage get paid off in less years?

Locoblade

I think their calculator calculates a lower monthly premium when you offset rather than reduced term, so it would still be over the same period as you put in initially.

The calc for the FD fixed offset will have to wait until I get home tonight but looking at it, its not going to come out very much different to the Accord one I wouldnt think, slightly less fees and the ability to offset, but slightly higher interest rate.

dimbo61

What about the 5 year offset fixed with yorkshire building society at 5.89% with a product fee of £495.
You have a fix for 5 years and the offset which is a tax free savings vehicle giving you 5.89%
unlimited overpayments or build up savings in offset to reduce length of mortgage and save thousands in interest. GOOD LUCK

getmore4less

Don't forget the follow rates for all the loans with FD fixed offset it is 6.00%(0.1 above the regular tracker offset) which might mean you do not need to remortgage with the others you might have to so more fees.

Watch the 80%LTV with FD, @£175k its £140k so will reduce one of the benifits of the offset till you have over paid a bit.

If you plan to Stooze money then the offset could work out cheaper in the long run(even one slow stooze purchace card will help a lot) if a hike in rates would hurt then fixing might be better or as well.

I am a fan of offset if you work the stooze money, not so easy now but still deals out there even with the BT fees, try the caculations with say £2k on a purchase card which should be easy(normal spends) if thta makes the deal better go for it and try to Stooze more.

If you use www.whatsthecost.co.uk mortgage calculator you can work these out.

By adding in the fees for each choice and setting the paymments(IO) the same for each you can pick an end date(press details) and see how much is left. This gives reasonable comparison. The proper comparison is to set a target amount owing and work out the payment to get to this but this needs iterations with that calculator, but not that hard.