FTB Mortgage Advice

BossTheSector

Hello all, looking for some mortgage advice.

Myself and girlfriend are about to buy a house. The house we are buying is £185k. We have a deposit of £47k, so just slightly more than a 25%. The mortgage options (25years) we have been looking at are as follows;

• Lloyds 2 year tracker @ 2.29% then 2.5%, fee 3% added to mortgage
• ING 2 year tracker @ 2.89% then 3.5%, fee £500

I would just like some thought/advice on what one to go for. We aim to make monthly overpayments ~ £400-£500 which both mortgages seems to offer.

We already have an agreement in principle with RBS for their 2 year tracker; 2.99% then 4%. This was based on a 20% deposit but now we can manage the 25% so are more inclined to go for one of the above. However, what I did like about this mortgage was the ability to switch on to a fix rate within the tracker period.

Again, any thoughts/opinions/advice are welcome!

BossTheSector

Bump.

I'd really appreciate any input.

BossTheSector

Another shamless bump!

Caracul

138,000 required.

Assuming the 3% is based on the amount loaned, fees for Lloyds:

3% - 4140. Assuming added to the mortgage, = 142140.
Monthly repayments = 627.55
Therefore paying 15,061 over the two year period

ING: 138500 borrowed..
Monthly repayments = 654.71
Therefore paying 15,713 over the two years.

However. The 3% added on will mean that whilst you pay less over the period of two years (initial rate), you have more to pay back. After the two year period if you were to stay on the deal, then Lloyds would slowly make headway before becoming the better deal. My advice would be ING.

Disclaimer - I know nothing. Im a FTB and have simply used a calculator here: http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml
to work out repayments. If its wrong, someone tell me?

BossTheSector

Thanks, those thoughts were along the lines of what I was thinking.

I now have a question regarding the ING tracker mortgages and overpayments. This is from the T&Cs of the mortgage;

Capital Repayments: Up to 10% of the loan without penalties
Overpayments: None

What on earth is the difference between a Capital Repayment and and Overpayment?

bramptonnozzers

Capital Payments are lump sum (generally one-off) annual payments, Overpayments are where you would pay back your £400-500 in addition to your mortgage payment without penalty. Personally ovepayments are preferred because you can pay back what you want each month over and above your usual payment. Be wary with overpayments though as they are generally restricted to the same amount as your usual mortgage payment. I would opt for an offset mortgage everytime!

Caracul

Just used the new mortgage calculator MSE have made. It would take 8 years in total before the Lloyds one gave better value for money