inital rate or overall cost of comparison

stopthespends

hi

could someone explain when looking for a remorgage do i go by the inital rate apr or over all cost of comparison??

just a bit confused!!!

thanks in advance

Comyface

Personally I would go with the initial rate, taking into account any set-up fees that you'll pay as well. Eg. if i was getting a three year fixed I would work out how much in total I would pay over the three yrs , adding up monthly payments, product fees etc and go with the lowest. The lowest rate may not give you the lowest figure doing it this way depending how much you owe and the size of the fees.

The overall cost for comparison looks at the whole term of the mortgage so calculates at the initial pay rate and then the rest of the term at the SVR (which will no doubt be different when your initial rate finishes) and each lender's SVR is different (and you might not go onto it anyway if you get a new deal) so skews the figure so the comparison is not that accurate.