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Re-mortgaging

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I curently have a mortgage of 27k on a property worth 100000k with Britannia flexible mortgage which is creeping onwards and upwards steadily with each rate rise. The current rate (before last week's rise) was 5.35%. I have shopped around on the Web and elsewhere and have come across a Norwich/Peterborogh BS offer of a 2 year discounted mortgage paying 3.74%. There are no set up costs or fees and I estimate that this will save me around 1k over two years and then I can re-mortgage again. Have you financial gurus any views on this. (There are redemption penalties on the N&P mortgage of 5% for 3 years, 4% for one year then 3% for one year) There are no redemption penalties with Britannia.

Comments

  • DiggingOut
    DiggingOut Posts: 770 Forumite
    So the sting is the third year on SVR which you have to put up with or pay penalties.

    May be worth it, though. 3.74% for two years, then a third at 6.5% (or whatever their SVR is). Except then you are on an SVR after that as well, and as your mortgage balance gets smaller the benefit of remortgaging gets small vs the costs/fees.

    How much longer do you have to go on the mortgage, can you afford to make any overpayments to reduce the balance more quickly, and are any overpayments allowed on the N&P mortgage?
    I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.

    If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.

    Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?
  • hansi
    hansi Posts: 3,001 Forumite
    Part of the Furniture 1,000 Posts
    SVR is 6.49%. overpayments are allowed and I have 6 years left to go. It's an interest only mortgage so it won't get any smaller. But with the Britannia, the new rate will take it up to 6.50% anyway. So for two years I'll be better off and who knows, the rate may be down by then!
  • DiggingOut
    DiggingOut Posts: 770 Forumite
    If you can afford overpayments of maybe £100 / month or more, I think the N&P sounds like a good idea. Your balance goes down so the third year SVR will be on a lower balance. You still might have to cut your overpayments that third year (because your interest cost will be higher), but you ought to be pretty well ahead.
    I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.

    If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.

    Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?
  • hansi
    hansi Posts: 3,001 Forumite
    Part of the Furniture 1,000 Posts
    SVR is 6.49%. overpayments are allowed and I have 6 years left to go. It's an interest only mortgage so it won't get any smaller. But with the Britannia, the new rate will take it up to 6.50% anyway. So for two years I'll be better off and who knows, the rate may be down by then!


    correction, the new rate wth Britannia will be 5.60% not 6.50%, Whoops!
  • DiggingOut
    DiggingOut Posts: 770 Forumite
    That's a big difference. If you can make the overpayments and reduce the debt significantly, I would still be inclined to change. Otherwise, your Brittania mortgage is not too bad.
    I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.

    If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.

    Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?
  • hansi
    hansi Posts: 3,001 Forumite
    Part of the Furniture 1,000 Posts
    If I change the mortgage but continue to pay the amount I am paying to Britannia, is there any way of working out how much quicker my new mortgage will be paid off?
  • lisyloo
    lisyloo Posts: 30,077 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    One of the simplest ways to do it would be to find a simple mortgage calculator.
    These usually give you monthly repayment when you type in the term and rate and then you need to play around with the term until it gives you the monthly repayment you want.
  • luckyfool
    luckyfool Posts: 1,683 Forumite
    Sorry am I being thick here . . . . but the N&P deal has more than one year of an extended tie in from what Hansi says.

    "penalties on the N&P mortgage of 5% for 3 years, 4% for one year then 3% for one year"

    Sounds like a 5 year tie in to me, with 3 of those years presumably at SVR.
  • Arggh! I need to learn to read! You are correct. Five years of tie-in, three of which are at SVR. Not such a good offer then, I wouldn't touch it.
    I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.

    If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.

    Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?
  • hansi
    hansi Posts: 3,001 Forumite
    Part of the Furniture 1,000 Posts
    Thanks for that. I was going to do it but I will stick with Britannia for now. Incidentally I did try to apply through the Market Place for the N&P mortgage, and put down my wfe as a joint applicant. She doesn't work which I told them and yet when I came to the page that required her details, it asked for details of self-employment! Obviously something wrong there.
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