What Mortgage?

Wig

What would you say is the best monthly magazine for comparing the mortgages on offer?

I am particularly interested in what they used to call Australian mortgages which are flexible on overpayments. I used to be with direct line and we had a permanent overpayment set up with them each month. Prior to them I was with Bradford & Bingley and although they said they could take overpayments they were unable to do it on a permanent basis, they wanted us to save up 3000 and then pay it in a lump sum.

With Direct line I paid off our house in 8 years.

I'm also wanting if possible a mortgage which will not charge completion fees (end of term) and will not charge deeds transfer/storage fees if such charges still exist. Of course the interest rate is the most important thing.

But anyway which magazine is best?

MortgageMamma

I wouldnt bother with magazines if I was you, as by the time they are printed there can be market changes so they are not always accurate. The internet is a good way of finding a mortgage, but by far the best way is to use a whole of market mortgage broker, who can look at all the mortgages in the UK, assess your needs and advise which one is best for you. With the Australian mortgage you are talking about, these are actually just mortgages where the interest is calculated on a daily basis, so if you make an overpayment it reduces the interest rate the same day. Many mortgages these days have interest calculated daily.

There are currently mortgages which we term flexible mortgages, these allow overpayments (some limited to 10% of the capital balance, some unlimited overpayments) underpayments (when you build up an overpayment fund) payment holidays (when you build up an overpayment fund) and borrow back which allows you to borrow back any money you have overpaid. The interest on these mortgages is calculated daily. Some of these mortgages have linked current accounts or saving accounts and some don't.

Whichever mortgage you choose you will always be liable for a deeds release/closing admin fee of about £225. You can avoid early repayment charges completely (this is where you are charged a % of your mrtgage balance for repaying it, or moving to another lender) if you use a tracker or discount mortgage, but this is not possible with a fixed rate mortgage. I would not concentrate too much on the closing admin/deeds release fees as they are subject to change during the lifetime of the contract.

I note you say that the interest rate is the most important thing, I jsut want to let you know that it is also important to calculate the effects of fee's for the mortgage too, such as arrangement fee, valuation fee, higher lending charges (sometimes applied if you are borrowing say more than 85% of the property price) telegraphic transfer charges, lending conveyancing fee's - the list goes on. What I am trying to demonstrate to you is sometimes a lower rate may be attractive but when you take the associated fee's and terms and compare this with a product with a higher interest rate, sometimes the higher interest rate is more cost effective.

HTH, feel free to ask more questions if you need to.

MM