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Should we switch companies?
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Chippy
Posts: 109 Forumite
I would appreciate any advice on the following dilemma!!
We are in the process of buying a second house for our student daughter and a couple of her friends to live in. As buy to let mortgages are more expensive and have so many hoops to jump through we have decided to raise the money on our current property. We currently owe £50,000 on our house which is worth about £240,000 but we are in a fixed rate of 5.49% until March 2010. Our current lenders (the Principality) have offered to lend us £90,000 on a lifestyle loan at 4.99% on interest only with a fee of £185. They also said that we could re-morgage with them from end Dec 2009 as we would be 3 months off the end of the fixed term- but obviously we have no idea what will be available then.
However a mortgage broker has identified the Barclays 3yr fixed at 3.89% with a fee of £995(added onto mortgage) as being our best option. If we went with this we would also have to pay £1500 ERC to the Principalty.
Assuming we complete in May and make our 1st payments in June my calculations show very little difference over the period June to December and my dilemma is do we stay with the Principality which will make the transaction much simpler and quicker but with uncertainty from December or do we switch now, which will take longer(and time is against us as we have lots of work do do on the house before September!) but we will then know what rate we will be on for 3 years?
Hope someone can help!
We are in the process of buying a second house for our student daughter and a couple of her friends to live in. As buy to let mortgages are more expensive and have so many hoops to jump through we have decided to raise the money on our current property. We currently owe £50,000 on our house which is worth about £240,000 but we are in a fixed rate of 5.49% until March 2010. Our current lenders (the Principality) have offered to lend us £90,000 on a lifestyle loan at 4.99% on interest only with a fee of £185. They also said that we could re-morgage with them from end Dec 2009 as we would be 3 months off the end of the fixed term- but obviously we have no idea what will be available then.
However a mortgage broker has identified the Barclays 3yr fixed at 3.89% with a fee of £995(added onto mortgage) as being our best option. If we went with this we would also have to pay £1500 ERC to the Principalty.
Assuming we complete in May and make our 1st payments in June my calculations show very little difference over the period June to December and my dilemma is do we stay with the Principality which will make the transaction much simpler and quicker but with uncertainty from December or do we switch now, which will take longer(and time is against us as we have lots of work do do on the house before September!) but we will then know what rate we will be on for 3 years?
Hope someone can help!
0
Comments
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If you need to security of a fixed rate then switch.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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