Remortgage Early - Avoid Redemption Fees?

AndrewSmith

What is the value of the property on which the mortgage is?

I assume that you are then looking for a repayment mortgage on a term of 10 years, amount £55,000?

What type of mortgage are you looking for? (fixed tracked etc).

What salary do you have?

Many thanks

Andy

dewmass

Value of property is £140,000
Yes, repayment mortgage
Flexible mortgage with the ability to overpay without penalty
Salary is variable unfortunately(sales). Basic Pay of £24,000. Last year was £39500 for the full year.

Hope that helps!

AndrewSmith

Brilliant, thanks.

Ok,

There are a vast number of options out there however I will just point out a couple. Remember though that I do not have the full case details and thus this should not be considered advice.

All of the below include legal work at no extra cost, and have no tie in after the incentive period.

On a 2 year tracker at 4.37% your payments would be £566.57 pm, No valuation fee, set up fee £499, release fee £90, overpayments allowed. Nationwide B/S

On a 5 year tracker at 4.50% your payments would be 570.01 pm, Valuation fee £245, set up fee £399, exit fees £100, overpayments allowed. Darlington B/S

2 year fixed rate at 4.79% your payments are £577.73 pm, Free valuation, set up fee £699, exit fees £90, overpayments allowed. Nationwide B/S

3 year fixed rate at 4.99% payments £583.09 pm, Free valuation, set up fee £499, exit fees £175.00, overpayments allowed. Skipton B/S

5 year fixed rate at 5.09% payments £585.78 pm, Free valuation, set up fee £499, exit fee £175.00, overpayments allowed. Skipton B/S

These are just a selection representative of the types of rates and payments you can expect.

Without the full case details it is not possible to specify accurately which is best, and would be foolish of me or anyone else to try and do so

Hope this helps, and gives you a rough idea of what is out there.

Andy

AndrewSmith

Another option could be the Melton Mowbury B/Soc 10 year tracker currently 4.84% payments of £579.07, Free valuation £495 set up fee. The best thing about this one is that there are no early repayment charges AT ALL throughout the life of the product, and it allows overpayments.

Just a thought.

Andy

dewmass

Cheers Andy, I like the 3 year fixed at Skipton and the Melton Mowbray one you mentioned. I'll look into these 2. The Alliance + Leicester have what seems to be a good offer that I saw this weekend. 4.79% tracker over 5 years with no fees and only £99 fees. Thanks very much for your suggestions and tips, very appreciated.

AndrewSmith

The alliance & Leicester 5 year one is a Discount not a tracker. Subtle difference but it means that it tracks a rate set by Alliance & Leicester (their SVR), not the Bank of England Base Rate.

Difference here is that if there was a rate reduction it is unlikely that this would be passed on to you straight away, but a rate increase mort likely would result in an increase of their SVR, thus increase in your pay rate.

With a BoE tracker, they move exactly in line with base rate fluctuations.

Andy

dewmass

Ah..I was looking for the catch in the small print, but its large and bold when it says discount! I've ruled out the fixed as the maximum yearly overpayment is 10% and I'm hoping to pay more off than that. Which has taken me to the Nationwide 2 year tracker. I didn't really want to pay a fee, but at least the exit fee is small and it tracks the base rate.

Would I be best making a decision now and setting the wheels in motion or waiting until August ish?

AndrewSmith

Do it now and reserve the rate.

Swap rates are o the increase. There is nothing to stop you from submitting an application now, but asking the lender's solicitors to hold off completion till it dovetails with your current Halifax rate ending.

If you are looking to make large overpayments I think you should, again, consider the Melton Mowbry as there are no restrictions at all, and no penalties for early or over payment.

Hope this helps and let me know if there is anything else I can do.

Andy

dewmass

I've looked into the Nationwide offer and they only allow £500 maximum overpayments per month, so in effect they are only allowing me to pay 10% per year. As you say, the Melton Mowbray deal is great as it allows full full flexibilty. There doesn't seem to be any exit fees or penalties for overpayments.

As I am hoping to overpay my mortgage by another few thousand before I switch, would this cause a problem at the applying stage?

AndrewSmith

Not at all,

At the point of completion on the new mortgage you would simply make the overpayment at the same time, thus reducing the new mortgage needed by the amount of overpayment you make.

No penalty will be incurred as you are redeeming the Halifax mortgage anyway.

Perfectly normal, and happens all the time. The key is either you or your broker (should you choose one) let the Lender's solicitor know that is what you are doing, they will do the rest and take the funds from you at the appropriate time. Dead easy, trust me.

Andy