which motgage is cheaper

blinko

ok according to my calculations

the 3.69 is cheaper but spoke to alliance and leicester on the phone and they reckon the 3.19 is cheaper

heres the two mortgages im considering

3.19% until 30.04.11 product fee is *2%

or

3.69% until 30.4.11 product fee 0.75%

are alliance and leiceste trying it on ??

thanks

Robert_Sterling_3

There is little to choose between them but offer 2 looks slightly the better of the two.

beecher

What's the size of your mortgage and remaining term? The higher rate will be a better option on a low mortgage, and the lower rate a better option of a high mortgage.

blinko

thats what i thought its 76k im basically coming to the end of a 2 year fixexd rate and going to be re-mortaging

and of course i'll remortgage after 2 years or when this deal expires

dimbo61

Why 2 years ? Do you like paying arrangement fees, survey fees etc
Why not a 5 year fix 3.99% HSBC or even longer rates are very low at the moment !!
Only my opinion and what do I know !

beecher

2% fee is £1520
0.75% fee is £570

Work out how much your payments would be here

http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=mortgage_calculator

and see if you're payments would be £40 less on the cheaper deal. I can't work it out as I don't know your term.

Agree with dimbo that a 5 year deal would be a better bet, though without knowing your LTV don't know if you'd be eligible for the 3.99% deal. Plus it is £999 which is again a big arrangment fee.

getmore4less

You have to compare like for like easiest is to add the fees, make the payments the same and see what is left after 2 years.

Lets say 15y term and interest only

1. £76k + 2.00% = £77520 @ 3.19% = £542.45, £206.07
2. £76k + 0.75% = £76570 @ 3.69% = £550.78, £229.07

Lets pay £551 and £230 and see what is left after 2 years.

1. £68,983.70 , £76,927.87
2. £68,571.99 , £76,546.94

2 is significantly cheaper over 2 years.

Gorgeous_George

I make the second mortgage cheaper.

Assuming 15 years, after 2 years you will owe

(1) £69,915
(2) £68,634

However , you will pay about £12 more per month for two years £288). A 3.8% deal with no fees would give the same monthly payment for two years but you would owe just £68,185 after two years

I'd look for a longer deal.

GG