Remortgage Nightmare - any advise?

jobits

We are cuurently coming to the end of our 3 year fixed rate with the Halifax - at a rate of 3.89. I have spoken with the Halifax with regards to a new deal but they have only offered me what I believe are extortionate rates.

I then started to look elsewhere and until this morning had decided to leave the Halifax after 12 years and go with Nationwide as they are offering a rate of 4.62% for a tracker.

I have then read the thread that Nationwide are putting all their rates up from 14 August. This is all proving to be a bit of a nightmare so have checked mortgagegenie and there appears to be a Woolwich rate for 4.99 fixed for 10 years, which would save me the hassle of going through all this again in 2 years time.At any rate it appears that my mortgage payments are to increase by over 100pds a month!!

I really do not know what to do! Does anyone have any pearls of wisdom they can offer me to release me from this ever growing dilemma?

dwsjarcmcd

jobits
When you bought your fixed rates 3 years ago, money market rate were much lower than they are today. It is these money market rates against which fixed rates are priced.
All you can do is source the best product you can, whether that's 2, 5 or 10 year fixed rates, or whatever, but it will be more expensive. No way round it, sorry

sarah1974_2

Most of the lenders are pulling their fixed rate deals at the moment due to the interest rate rise, so what is there one day is gone the next. The best advice I can give you is to look for a financial adviser in your area who can arrange the mortgage for you and take all the hassle out of it. They have access to software which is updated everyday. Check out the FSA website and it should give you a list of advisers in your area. Ask the adviser if they charge you a fee. Obviously try and get one that doesn't. They get paid a fee by the lender for placing the business with them, so not all advisers charge a fee as well. Good luck.

jobits

Thanks for your post.

I guess what Im trying to say is given the present trend is a 10 year fixed a good idea or would you go for a tracker in the hope that interest rates at some point go back down?

sarah1974_2

The FSA (financial Services Authority) are against long term fixed rates. (anything over 5 years.) Personally, I wouldn't take the gamble with a tracker at this time. At the moment, I personally can't see interest rates coming down, in fact the general consensus in the world of interest rates is not if they will go up again but when. I would personally opt for a 3 year fixed rate. Safe, but not tying you in for too long. Most fixed rates are portable now, so if you did want to move house within the fixed rate period you could move without paying a penalty by porting the fixed rate to the new property. Fees are quite high on deals at the moment so a 2 year fixed rate may not be beneficial if you have to pay out fees again in just 2 years time.

dwsjarcmcd

jobits
You will get lots of people saying they are a good idea and just as many saying they are not! Good points (IMO) are really over the certainty of payments, which may be valuable to you and that you don't need to pay the ever increasing remortgage fees and the associated hassle.

Bad points are that you are locked into a rate which could decrease in future years and you are stuck with it and they restrict your options (to your existing lender) if you move home. If there situation apply then it will cost to get out of the deal.

Which is the most important to you is for you to decide

KTF

Any deal you find now if going to cost you more than your current deal so its a case of 'damage limitation'.

Your first step should be to contact a broker (rather than trying to do it yourself) and let them give you a shortlist of deals.

I dont know when your deal ends but allow around 6 weeks for the change over process to take place. If you have less than 6 weeks before your current deal ends then I wouldnt hang about as going from 3.89 to the SVR is going to hurt :P

mleonard79

Wow 3.89% that's an amazing rate - those kind of rates simply don't exist at the moment so as others have said paying more is unavoidable. I'd try to get in quick if you want a fixed rate as these are on the increase. Tracker rates are slightly lower but it depends how you feel about interest rate rises and how secure you need the payments. I'd go and see a fees free broker and get some advice but you need to prepare yourself for paying more unfortunately.

biting_the_bullet

The Op's situation is going to come more to the fore in future months. If folks really stretched themselves when rates were in the 3-4% bracket, things are going to get decidedly tricky for them.

More forced sellers? Higher interest rates? Lower future house prices??

Think the writing is now on the wall.

ginger_nuts

i had a 2 year tracker with the woolwich .after the 2 years the woolwich offered me a new (no strings )deal .
I would use the woolwich again .

jobits

Thanks to everyone for their sound advice.

I think we have decided to go with a 3 year fixed rate. I am interested in the Portman rate of 4.99. My only concern is whether their interest is calculated daily or not?

I have looked at their website and can only see mention of monthly/yearly interest.There is quite a high likelihood of us paying off up to 5K per year - does anyone know if having ineterst calculated on a yearly basis or a daily basis would make a big difference to the outstanding debt?

Once again. and advise would be very greatly appreciated......