7year deal, worth it?

dimbo61

Looked at the coop deals ( they have 2 ten year fixes) but it works out cheaper to not pay the £999 booking fee.
You can also make upto 10% overpayments of the balance each year.
Amount still owing after 10 years would be £51,332 ( sad i know)"whatsthecost"

mantamark

so over 10years i would only be paying off 41%, even though its half of the term? Hmmm, that kinda sucks! So the 2nd 10 years i would need to pay more off.

Is this where overpayments come into play? Is it 10% of a years payment, or the total loan?

Many thanks, very informative!

andrewmp

mantamark wrote: »

so over 10years i would only be paying off 41%, even though its half of the term? Hmmm, that kinda sucks! So the 2nd 10 years i would need to pay more off.

Is this where overpayments come into play? Is it 10% of a years payment, or the total loan?

Many thanks, very informative!

It's just the way the interest payments work.

In the first year, on a £500 payment, you might be paying £400 interest and £100 off the capital. The interest amount will go down every month/year and the capital paid will go up.

Overpayments go straight off the capital.

RufusA

Look at the small print!

Over the next 10 years lots of things could happen. You may need to move for a better school / work, or something may impact your relationship, income or health.

IMHO 10 years is a long time to fix for, UNLESS the mortgage is sufficiently flexible to allow it to grow/change with you if you need it.

Key questions:

Can you overpay - how much by?
Can you draw down any overpayments?
Are agreed periods of arrears (aka payment "holidays") available in case of redundancy or maternity leave?
Can you port it to another property?
Can you increase the mortgage and on what terms?
Can you pay off a lump sum?
Can you end the mortgage early - what are the costs / penalties?
Can the mortgage company change the fixed rate / terminate the deal under certain circumstances (i.e. missed payment, exceptional BoE rates)?
etc.

Worth speaking with a good whole of market mortgage advisor if you are uncertain!

Rufus.

mantamark

thanks for that info, i will make sure i find the answers before we procede!

I hear london & country are good people to speak to?

Thanks again.

give

Have you tried going to the fsa sites tables and looking at the mortgage comparison. They compare all available mortgages and its not commercial but depending on your ltv you can still get some good rates on longer term loans if you are not looking for a high income multiple

mantamark

do you have a link for that site?

Our ltv works out at just under 60%, which is good for lenders i think?

Thanks, mark.

andrewmp

www.moneysupermarket.com has a decent comparison tool

give

The site is https://www.fsa.gov.uk/tables and you just put your details in and the term you want the loan for and it will show you what mortgages match. An ltv at that level will give you a lot of options. Remember that all the lenders have different income multiple figures but at least you can see a direct comparison for the deals on the market. You can give them a call and find out what the criteria are before moving forward with any application.

give

I also found this mortgage calculator to be quite handy but don't bother filling out the other form which supposedly compares mortgages as it looks like it just collects the details!

the url if the above link doesnt work is https://www.emortgagecalculator.co.uk