Mortgage Reduction Beginner to Novice - The Show Begins

edinburgher

How much would you save over 2 years with the lower rate? I'd plug them both through a calculator before going with any gut feelings.

On a mortgage of £100k, option 1 would be c. £500 cheaper over the 2 years.

ammonite

I agree with Ed to put them in to a calculator but as mentioned in my diary I like the 'security' of long term fixes. Each to their own though but great rates!

lulabelle1

5 year sounds like a great plan. I always favoured long term security - sadly we took our 5 year fixes out not long before the rates dropped. We've been enjoying the BMR of 2.5% for a while but I could have kicked myself for taking the 5 year fixes.

The good thing for you is that the rates really can't go any lower, so its the best time to fix for 5 years.

If you have the budget - perhaps reduce your mortgage term a little bit and make the OP's to make the most of the low rate so that you're in a really good position once the 5 years comes to an end.

I don't envy you the decision - I always make the wrong one when it comes to these things!

Mortgage_Reduction_Novice

Of course we plugged and played with the calculator - comparing the two over 2 years/looking at our affordable OPs with either/ general playing with spreadsheets and the like etc. etc.

Yes the 2 year (because of the lower interest rate) comes out the winner over 2 years BUT when we looked over 5 years (keeping the 2 year interest rate the same - unlikely but a way to see best case scenario) and factored in another set of mortgage arrangement fees (usually around the £1000 mark) there wasn't much in it. Also the gamble that we'd be able to get the same rate again in two years time is highly unlikely so we think we'd be better with the 5 year.

Have we missed anything to think about?

We did find ourselves a 5 year fix at 3.04% (within our LTV too!) so we'll be mentioning this to the FA as it beats the 5 year he found for us!

lulabelle1

The 5 year seems the way to go....... At least you don't have to pay any attention to or worry about any rate rises. Peace of mind is also something that should be factored in when making the final decision.

Mortgage_Reduction_Novice

Mortgage_Reduction_Novice wrote: »

We did find ourselves a 5 year fix at 3.04% (within our LTV too!) so we'll be mentioning this to the FA as it beats the 5 year he found for us!

It seems the FA was right... this provider does not pay the legal fees and the arrangement fees are higher... so overall the other 5 year fix is better. Also while on the telephone to OH, FA mentioned that the rate had dropped from 3.29% to 3.19%... nice timing!

lulabelle1

Excellent news, go for it!!

misscousinitt

Great news on the mortgage rates and nice capacity for overpaying too.

MCI

Tilly_MFW_in_6_YRS

Hi MRN, 3.19% for 5 years seems a good deal. It's never easy remortgaging as we don't have a crystal ball, but being able to OP is good news as well.

I could do with sewing lessons from you at the moment

Best wishes Tilly x

Mortgage_Reduction_Novice

We have finalised our decision to the 5 year fix and notified our FA (to think I puked on him when I was a baby and he's now dealing with my mortgage makes me embarrassed:o and probably he feels old!). I've printed out three month's worth of payslips in anticipation of the paperwork phase. All should be in place to start with the new mortgage provider in January. We're keeping our monthly direct debit the same so we will be OPing a greater amount monthly!

Well... after all that mortgage excitement it's back to MFW basics and small things to feel pleased about:

I've just been handed my new contract to sign (yes the one I started on 1st August!!!) - I always find it weird how these are opened once they reach our building then are given to us by hand having never visited out pigeon holes! Anyway, once signed and returned, I have a job confirmed until 31st July 2014.

I've exchanged £12.50 worth of Tecs0 vouchers for Days Out vouchers... we already have a £10 Days Out voucher leftover - this gives us enough for three activities while we're on our wedding anniversary trip. With these and the head's up from Edinburgher about cheap accommodation, plus booking train tickets early with our rail cards too.... it's turning into quite a frugally fun trip! (maybe one day I'll write a book called Frugal Fun!)

OH is home but was meant to be away with work this week... it's really challenging my 'padding out' skills in the cooking department. I'd already meal planned and postponed my food shopping till Friday when his plans changed - being stubborn, I'm not changing my plans and spending on food shopping early! My idea was that by Friday we're half way through the month and I'm not yet half way through the food shopping budget.

Mortgage_Reduction_Novice wrote: »

And I've promised myself not to book any mystery shops until next Sunday onwards to allow me a week's breather.

I've broken that promise to myself - I did one this morning and have three booked for Friday and another for Saturday! Who needs to breathe when there's mystery shopping to be done and extra cash to be earnt?!

There is a minor miracle of a £78 reimbursement for the fitting of the non-faulty radiator appeared in our joint account! My perseverance paid off!