RBS mortgage switch advice needed

a1pacino

Hi,
I am a FTB and I put 15% deposit and have a mortgage of £105,000. I have just started a 5 yr fixed at 6.39% with RBS and was advised today by a collleague that this was too high and to try and switch to a 2 or 3 year fixed at a lower rate. Does anyone have any advice on this? Would I would incur any charges or penalties if I changed mortgage now even if I went to a 3 yr fixed with RBS?

dimbo61

You need to read the paperwork that came with your mortgage offer !
Now I think it will say you have to pay a 3/4% ERC if you wish to change mortgage early.
Just had a quick look on RBS mortgage website and there 2 years fix is 6.09% with a 15% deposit and £999 fee.
You have long term security for the next 5 years no matter what happens to the country or which party is running the show.
What you can do is overpay as much as possible over the next 5 years to reduce your debt and increase the equity in the property so you can get a better deal when you remortgage.

dimbo61

The ERC on there website is 5% in the first year,4% in the second , 3% in the third and so on.
So stick with your mortgage deal and try to overpay by the 10% allowed each year.

a1pacino

thanks for getting back so quickly, i would have to pay 5% of £105,000 if I were to switch now? if thats the case it looks like I will be sticking with it for now!

dimbo61

Thats what I have read off the RBS website but PLEASE read the paperwork!

a1pacino

Thanks very much for your help:) Just had a look at my paperwork and your right it would cost me £5206.55 to switch :mad:. I didnt know ERC was also for switching my mortgage deal I just thought that was if I wanted to pay it up in full I would have to pay 5% extra in 1st year, 4% in second and so on. You are also right about the security aspect at least I have peace of mind i am going to try and overpay as much as I can to try and chip away at balance.