Help we need advice please

Seafarer1066

Hi, I would like some advice about remortgaging please.

My wife and I currently have a mortgage on a little one bedroom flat we live in.
It is worth approximately £70,000 and we owe just over £45,000 on it. We have a fixed rate of 6.09% that is due to end in June.

I work full time and my wife is at university doing a degree and will graduate in 2010.

I have had a look at various deals and a couple with First Direct caught my eye.

2.89% Tracker for 2 years with a £799 arrangement fee.
2.99% Fixed for 2 years with a £599 booking fee and £299 arrangement fee.

Both these deals look quite good but I am confused as to what to do.

We are planning to either sell the flat next year and buy another larger place to live, or let the flat out and try to buy somewhere bigger but we have not decided which option will be best. That isn't the problem though.

I am not sure whether to get tied in to a two year deal either fixed or tracker and try to transfer the mortgage if we wish to sell, or whether we should stick with Halifax's current 3.5% SVR and stay on that for a year and run the risk of the rate rising.

My reasoning for liking the SVR is that we would not be tied-in in a years time and would be flexible to do what we wanted.

I also noticed that the fees for remortgages are quite high and when you add them to the good rate of say 2.99 % then the deal doesn't look that great.

I am not sure whether to stick with the SVR with Halifax and take the risk that it might go up or try to get a better rate elsewhere but get tied in for two years.

What I do know is that when my wife finishes university we want to move and we want to have flexibility and not have to worry about early repayment charges etc. But I don't know what we should do. Should we stay on the SVR or go for a deal?

Any advice would be greatly appreciated:j:j

Thanks

Cannon_Fodder

I think the greater danger is that after 2 years you will be really badly hit by the rates then. Better imo to go for a 5-yr deal that is portable, or stick with SVR and then review quarterly, to see if you can see out the year you need.

(1 less fee in a 5-yr deal helps versus multiple 2-yr deals.)

socrates

I think SVR is the way forward

Seafarer1066

Thanks for that Cannon Fodder I see what you mean about paying multiple fees on a two yearly basis.

Thanks for your reply socrates :j:j

TEDDYRUKSPIN

LOL. How can you tell someone to go straight onto a five years fixed Cannon Fodder without knowing their financial situation? Did you shake your magic 8 ball and come out with that information?

As you can see from this post, two different answers have come out!

Seafarer! First direct require the money upfront! They do not allow you to add to the mortgage. Without carrying out a full mortgage application you will not know if this will go through. Warning also! First direct are really slow at processing their mortgage applications. I have heard as slow as 8 weeks to get a response in which they could say that you have been rejected.

beecher

I'd be tempted to stay on the SVR with that size of mortgage, and to keep things flexible. Each 1% increase in rates probably equates to less than £20/month (check that - depends on your term and I haven't had coffee yet!) so you're at less risk of being caught out than people with high mortgages.

Seafarer1066

Thanks beecher, to be honest I am starting to think that staying with the SVR may be the best thing I am not sure it is the best thing for us to get tied into a 5 year deal at the moment.

Cheers also Teddyrukspin, it's funny you should say that....when I spoke to the lady on the phone from First Direct I asked her when the fees had to be paid and she said that she wasn't quite sure??? mmmm I did think then that she did know but wanted to get me passed through to one of their Financial Advisers before they told me that you had to pay upfront.

Thanks for your responses

Cannon_Fodder

TEDDYRUKSPIN wrote: »

LOL. How can you tell someone to go straight onto a five years fixed Cannon Fodder without knowing their financial situation? Did you shake your magic 8 ball and come out with that information?

As you can see from this post, two different answers have come out!

Its called being asked for an opinion. "Any advice would be greatly appreciated"

I happened to give BOTH answers, if you can read.

Its wasn't a "you must do this". I said "imo" portable 5yr OR SVR...

2yr deals IMO are dangerous territory, as IRs generally will not stay where they are now, its a temporary situation to facilitate QE. Bail-outs, anti-recession spending, QE etc will lead to inflation and rates will follow, IMO.

The SVR option might just be ok, or graduation/moving might be a touch late, in which case 5yr deals would be MY preference.