THe cost of declining an offer

johnbhoy10

Hi-i have an offer from the RBS for 5 year fixed at 4.69% with fee of £299 and they pay valuation/legal fees. I initially paid the fee but phoned them up and they have added on to mortgage and refunded my fee. I think if i decline their offer i've read in their paperwork that i pick up the cost of their kerbside valuation but that is it. There is also the fact that a new credit check will be on my records. I've being pretty ott about this recently but the mortgage is the daddy, isn't it. I have the standard security signed and ready to go in the house. Any idea when the latest i should be sending this off should be. This was about the best offer on the go about 2 weeks ago but now with talk about libor and fixed rates dropping i don't want to be hasty. I have also the fact i'm paying ERC of 3% on approx £77500 to consider. I think i'll sit tight for the next couple of months.

Cannon_Fodder

Does the ERC change/end in the next couple of months?

If its a long way off, so you are "pretty certain" of incurring the 3%, then take that out of your calculations.

I suspect the latest downward revision in rates will, at best, put them where they were when you got this good offer...with the risk they might adjust their fees to counter the lower margins if rates do get squeezed, I'd proceed.

Its the next 5 years you are protecting. A month here or there is relatively unimportant, should you miss-time a sudden upward swing you risk being over 5% for 5 years...

If its close at hand, then avoid the ERC.

johnbhoy10

Thanks. Unfortunately my ERC is applicable till end of feb 2010. So i have to take account of it. The way i see it is this offer has given me a bit of time to decide. I can wait till sept, which importantly gets me within six months of my current deal ending, then decide to go for this deal or try and get something similar or even better in writing for six months. Are lenders giving offers for six months at he moment? I think that the RBS/NATWEST are a standard three months.

unite79

You have a £2000+ penalty that expires in 8 months - What are you thinking in terms of getting a new rate now - based on the penalty - you are in fact getting a rate neare to 5.4% - Do the math - in fact you should have done that before you wasted £299!

johnbhoy10

unite79 wrote: »

You have a £2000+ penalty that expires in 8 months - What are you thinking in terms of getting a new rate now - based on the penalty - you are in fact getting a rate neare to 5.4% - Do the math - in fact you should have done that before you wasted £299!

The ERC is actually about £2300 and i have done the MATHS. And if i can't get a rate of circa 5.95%(and there's no guarantee of that) or less when my deal runs out i would be better off going with RBS. Did i not clearly state that my fee was refunded today as i added it to mortgage. Thanks for your contructive comments anyhow.

unite79

I see so you are gambling on rates going up over 1% on 5 year deals - and bearing in mind also that the new will need to be 4 years and 4 months!

In my opinion - I think you have found a great rate, but at the wrong time.