What do you guys reckon??

benbenandme

Its another of those "please can I have your advice" kinda threads

My situation: my 5 yr fixed rate ends in June with Abbey, was on 5.19%. My mortgage balance then will be approx 46K (property is worth about 150k now). It was 60k 2 yrs ago but I have been overpaying as part of the mfit challenge on the mfw board and if I keep doing this (which I plan to), I should hopefully be mortgage free by my 40th in just over 4 years (August 2013).


I have spoken to Abbey and they have offered me: 2 or 3 yr fix @ 4.49% or 4 yr fix @ 4.99%, no fees with any of these offers. I do however like the look of the oneaccount. I know its not the best offset etc and I have read the thread about the interest cuts etc on here, however, I like the fact it doesn't have a fee to join (other than the valuation etc), and that I can continue to overpay (whereas with Abbery I will be limited to 10% per year which will let me pay a smaller and smaller amount each year obviously);) Also with Abbey if I went for the 2/3yr fix I would be unlikely to get another deal afterwards as the total amount would be too low?

So anyway, what do you all reckon? I am swaying towards the offset as I think it will help motivate me to find more to chuck at the mortgage each month. I am pretty organised with stuff so I think I would be fine keeping track of everything.

Also another question for anyone with a oneaccount ... I saw that you can have pots for different stuff, is there a limit to how many? At the moment I have savings in an online account and it is split into 10 different pots which works great for me, could I do this with a oneaccount or is it just one "savings" pot?

Many thanks in advance for any help / ideas / suggestions

Forever_Red

If it was me, then I would opt for the 4 year fix and have the mortgage term of 4 years (repayments £1,059pm). This way the mortgage would be definitely paid off at the end of the fix and I wouldn't be concerned what the interest rates would be as I wouldn't need another deal at the end. This is only suitable if you can meet these payments for the next 4 years rather than have a term of say 6 years, paying £740 and overpaying approx £320pm.

The reason I would go for this (or some similar 4/5 year deal) is that I wouldn't be disciplined enough to overpay a set amount each month / year. I would probably spend it on something else that wasn't needed.

Without knowing what you pay now and what you can afford to overpay, it's hard to know which way to go. If you are disciplined enough to do the overpayments then that might be better, because if you hit tough times you can stop making the overpayments and still make the original repayments.

Good luck, whichever way you decide to go.:D

Alan

getmore4less

whats the follow on rate on the current deal.

Might be worth going onto that and overpaying

Fairwinds

I'm looking at A&L 3.99% 5 Yr fix with no arrangemet fee - I think our circumstances are similar ( although I'm now just the wrong side of 40)
I believe you can overpay by 10% each January + £499 each month

Oh I think you need a premier direct account to get that rate - imagine you can just open one.

benbenandme

Thanks for the replies

GordonD ... I will go and have a look at that one too, thankyou

Getmore4less ... current svr with abbey is 4.69 so oneaccount would be better (4%)

ForeverRed ... I would love to do that but daren't commit to it as lots of my income comes from maintenance / tax credits which could easily change their payments / ex could be made redundant and pay less etc... I currently pay £340 a month payment and then around £300-£500 overpayments. This all comes from matched betting / saving a bit of my income / online surveys / mystery shopping etc. I have been squirrelling away all these extra bits for about 2 years now and have reduced it from 60k to currently about 47.5k

Gorgeous_George

If you are going to open the A&L Premier account, contact a A&L Premier account holder (:whistle:) and you could receive £125 through their @RAF scheme.

GG

benbenandme

I had a look at the A&L fixed rate, which does seem a very good offer, but I can only see where it lets you overpay by 10%, where does it say you can overpay another 499 a month? Sorry if I'm being dopey and missing it Also I really want it gone by august 2013, a mini-challenge I set myself, so am not sure I'd want to tie in that long.

dimbo61

You are a woman on a mission !
To clear a £56,000 mortgage in 4 years is a big ask
Even at 3.99% its £1264.18
At 4.99% over 4 years its £1289.39
The A&L deal is very good 5 years at 3.99% with no fee
Taking that with a term of say 10 years gives you a monthly payment of £566.71 a month and if you are allowed to overpay by £499 a month on top plus 10% you could be Mortgage Free in 4 years ( but you would need to leave a small balance until the end of the 5 year fix )
At the end of your 5 year fix you would still owe £31,000 ( with no overpayments )and if you overpay by £499 a month you would only have about £1000 left to find( but this is over 5 years )
GOOD LUCK in your MF mission.

Fairwinds

benbenandme wrote: »

I had a look at the A&L fixed rate, which does seem a very good offer, but I can only see where it lets you overpay by 10%, where does it say you can overpay another 499 a month? .

That's what they told me on the phone. I now have my key facts document and its as clear as mud. I've spent the last twenty minutes trying to cut and paste the relevant sections but it won't let me do it.

It does talk of regular or lump sum over payments of less than £500 but I can't see that it says they don't incur the charge - but why would it be mentioned otherwise??

benbenandme

Dimbo, its 46k not 56k If I stay on track it will be about 40K by the end of this year, 30k by the end of 2010, 20K by the end of 2011, 10k by the end of 2012 and then gone by August (using some savings if necessary ). Obviously things could change, but thats my overall plan. My monster will be 10 by then so it would free up money for nice holidays and saving for uni etc .. :rolleyes:

dimbo61

Sorry cant read even so £46,000 over 4 years at 3.99% is £1038.43 a month.
The 5 year fix from A & L is still a good deal and £46k over 5 years at 3.99% works out at £847 a month.
Abbeys SVR is I think 4.69% at the moment so your mortgage would decrease slightly in June and you can then overpay as much as you like!
Abbey also offer a 5 year fix at 3.95% but fee is £1000
Abbey also offer a 2 year fix at 2.99% fee £599
Just food for thought