transfer mortgage or get new one??? not sure

hamblettamaud

i am in the unlucky position of having fixed a mortgage for 10 years at 6.2%.

i am also selling my property in order to buy another one and i have to make this decision:

if i transfer my mortgage i will get the lower interest rate, but i have to do this within three months or else i'll have to pay a £5,000 fee to pay off my original mortgage.

so, would i be better off in the long term paying off my mortgage (6.2%) and transferring to new one at lower interest rate (???%).

you know, i'm not even sure what i'm asking here.

confused31_2

I think if you transfer your mortgage it stays at the same rate, unless you pay the redemption fee which is the 5000 pound you stated, any additional money needed will be at a new rate if you need any.

Basically when you transfer a mortgage you get the same deal on your new property.

Any additional money can be added through a seperate mortgage, so you will only get a lower rate on the additional amount, im afraid your stuck on the 6.2% rate unless you pay the redemption.

Doozergirl

best 10 year fix at the moment with 40% equity is 4.79% I think.

You'll have to do the maths on that!

hamblettamaud

confused, i was told when i got the mortgage that it was transferrable and that new rates would transfer too, but i'm also convinced that my mortgage seller is a lying cow who would say anything to get her commission.

doozer, sounds like i might be better just to pay the £5,000 to get rid of old mortgage and then go for completely new one. the maths is beyond me though LOL

MX5huggy

Post on the Mortgage board (2 up!) I can't find it now but they will point you in the direction of a spread sheet where you can compare 2 mortgages quite easily. Its set up by Chris Gamlin

confused31_2

im in a similar situation, i have a fixed rate with the nationwide at 4.69 that has about 20 months to run, this mortgage is portable. if i want to pay it off the redemption fee is about 900 pound.

Now i need to borrow a additional 55000 pound and i have been told by the nationwide i can take a new mortgage product out for that and have two seperate mortgages on the new property.

Or i can pay the redemption fee and pay my original mortgae off and have a new one for the whole lot.

I hope you can, but i think you may be right she may be a lying cow.

if you put the figures up i will work it out for you

confused31_2

this is based on a 100,000 pound mortgage with the 2 different rates.

6.2% 656.58 a month 10 years = 78,789
4.79% 572.42a month 10 years = 68,640

so you save about 10,000 pound by paying the 5000 pound redemption this is based on a 100.000 pound mortgage