Brain meltdown due to choosing mortgage!!

mariboodebumbum

Arghhhhh! Someone out there sort me out! We are downsizing to a property valued at 290k, we want to borrow 100k over 9 years. we earn 60k between us. A whole of market broker is advising me to go with the Woolwich 2.74% over base tracker for 2 yrs. But I have seen a HSBC 5yr fixed at 3.99% which seems a good deal- surely the interest rate can't fall anymore!

Anyway the upshot is I want to pay as little as possible and make overpayments -
WHAT SHOULD I DO!!!

And another thing , this whole of market thing is a joke because some of the mortgage lenders will only deal with you direct. :mad:

beecher

5 years at 3.99% looks great to me - are there any catches with it as it is quite a bit cheaper than any other 5 year fix I've seen. Why don't you go back to the broker and ask why he'd recommend the 2 year tracker, and what the advantages are over the deal you've found.

anselld

MoneySupermarket gives First Direct tracker base+1.89% offset as the cheapest overall over 9 years.

But you need to choose; do you want the stability of a fixed rate or the potential savings if rates stay low for some time. Nobody can tell you the right answer to that question, it is down to your personal preference and your prediction of the future.

mariboodebumbum

He hasn't offered it to me because he can't, HSBC will only deal direct and this product only came on the market yesterday.

mariboodebumbum

anselld wrote: »

MoneySupermarket gives First Direct tracker base+1.89% offset as the cheapest overall over 9 years.

But you need to choose; do you want the stability of a fixed rate or the potential savings if rates stay low for some time. Nobody can tell you the right answer to that question, it is down to your personal preference and your prediction of the future.

You are all going to go nuts! I have been with the same bank for 25 years and the thought of having to move all my banking fills me with dread.

m_13

I've found the HSBC offer here: http://www.money.co.uk/mortgages/mortgage-details/HSBC/5yr-3-99-Fixed-LTV-60-Special-Direct.htm

It's says:

Monthly payment can be increased by up to 20% without incurring an early repayment charge

I read that as saying if your monthly payment was £100 you could increase it to £120 which is actually quite restrictive. It also suggests that you can't make a lump sum overpayment either. Using Karl Jeacle's calculator your monthly payment would be £1,103.63 and you would be restricted to overpaying an additional £220.73. If you overpay that each and every month then your mortgage would end 1 year and 8 months early and you would save £3,849.40 in interest.

The Early Repayment Charge is 1% of the amount repaid early for each remaining year until 31/03/2014, reducing on a daily basis. This sounds quite good but if you overpaid by £500 in 2010 you'd then pay 1% of that amount for 2011, 2012, 2013 and 2014!

If you hadn't said that you wanted overpay then this wouldn't be an issue but the overpayments on this deal do seem to be extremely restrictive.

anselld

mariboodebumbum wrote: »

You are all going to go nuts! I have been with the same bank for 25 years and the thought of having to move all my banking fills me with dread.

Why is that? Banks are banks, just go with the product you want. I was with RBS for nearly 30 years before moving to FD. FD have been given wonderful customer service and they are one of the few banks which are not having to be bailed out or owned by the government.

You cant shop around for the best deal and the be frightened of changing to it !!