First Direct Tracker +0.49% or +0.79% - Which to choose?

Kez100

With all these 'scary' newspaper headlines you wouldn't think these two deals were out there. Is there a very tight max LTV on these?

Locoblade

George, as you'd have to pay £968.59 a month if on the +0.79% deal, you need to pay the same with the 0.49% deal to draw an accurate comparison. If you do that and overpay the +0.49% with that £22.50 a month difference, the capital will break even a whole lot quicker than 5 years, as well as reducing the term.

lju

lisyloo wrote: »

I have a similar mortgage and I've decided to take it (with a view to this being for the whole term).
At the moment it's very competitive and I don't see that changing short term.
Obviously longer term no-one knows but you have to remeber that if you swicth to another deal that there will most likely be fees involved - application, valuation, legal etc. and these have been going up, so it needs to be significantly better to cover the fees.

I'm taking the view that mine is for term, but there is no guarantee either way about future deals.
I just don't see deals improving or fees for quite some time.
The current economic mess will take at least a few years to unravel.

Which one have you decided to take?

Locoblade

Kez100 wrote: »

With all these 'scary' newspaper headlines you wouldn't think these two deals were out there. Is there a very tight max LTV on these?

Not really, 80% LTV is better than many.

lju

For an easy comparison what would the figures be if I paid £1000 per month on both deals? I am currently paying nearly £1200 as I overpay but will reduce this to a £1000 whichever deal I take, and intend to offset the £200 into on of their linked accounts in case I need it for anything.

Locoblade

lju wrote: »

For an easy comparison what would the figures be if I paid £1000 per month on both deals? I am currently paying nearly £1200 as I overpay but will reduce this to a £1000 whichever deal I take, and intend to offset the £200 into on of their linked accounts in case I need it for anything.

Regardless of how much you overpay, it doesn't really change the break-even month (maybe a month or so depending on the amounts), the main thing is you overpay the difference. For info, your break-even month is about 28 months, but that doesn't take into account the valuation or closure fee.

If you only pay £1000 a month for a £161K loan over 18 years though, you won't be paying it off fully! Minimum capital repayment for the lower rate loan would be around £1138 a month, or £1157 a month on the +0.79%, unless you're planning on reverting back to your original 25 years remaining?

lju

Locoblade wrote: »

Regardless of how much you overpay, it doesn't really change the break-even month (maybe a month or so depending on the amounts), the main thing is you overpay the difference. For info, your break-even month is about 28 months, but that doesn't take into account the valuation or closure fee.

If you only pay £1000 a month for a £161K loan over 18 years though, you won't be paying it off fully! Minimum capital repayment for the lower rate loan would be around £1138 a month, or £1157 a month on the +0.79%, unless you're planning on reverting back to your original 25 years remaining?

Yes I know £1k a month will not pay it off in 18 years. The original loan was over 30 years and I've got it down to 18 years left by overpaying when it would be 25 years remaining if I hadn't.

Unless I change my mind before I wake up I'm going to take the +0.79 over 25 years and still over pay as and when I can afford to.

Gorgeous_George

Locoblade wrote: »

George, as you'd have to pay £968.59 a month if on the +0.79% deal, you need to pay the same with the 0.49% deal to draw an accurate comparison. If you do that and overpay the +0.49% with that £22.50 a month difference, the capital will break even a whole lot quicker than 5 years, as well as reducing the term.

Overpay by £22.50 and the term is reduced from 25 years to 23 years and 10.5 months (assuming rates remain the same for the term of the mortgage).



GG

Locoblade

Yup, it might be good for you. With the loan over 25 years, and adding on the valuation and completion fees, the break even for the +0.49% rate is about 34 months, so getting on for 3 years.

susie51

we too are in this situation (about to remortgage before dec 31st, deciding between FD trackers +.49% +.79% +.99%

The advisor confused me though, saying the .49% and .79% trackers were interest only mortgages, with a repayment option; they sent you an amount each month of the minimum you have to pay (ie the interest payment) then its up to you each month how much you pay on top of that to pay off the capital.

This sounds quite staight forward, but am I missing something? whats the difference between this and an ordinary repayment tracker mortgage?

ie will we be paying off the same amount of the capital with the FD 'interest only/repayment option' mortgages as a straight forward repayment one.

any advice appreciated.