what type of mortgage is best

working_mum_3

hi,
My fixed rate has expired (nationwide) and I'm about to consider remortgaging. My financial situation is such that i would like to have the next 2 years repayments kept as low as poss., but then in years 3 or 4 pay off most if not all of the mortgage.

What type of mortgage am i best off considering ? I am prepared to take a degree of risk with interest rates , i.e I would be quite happy to consider tracker/flexible ?. Overall i want the cheapest mortgage possible over that timescale.

Are trackers/flexibles the cheapest over a short time, or should i be considering a different product ? Is there a good mortgage calculator that would work out the overall cost over those 4 years ?

advice appreciated, thanks

MortgageMamma

Hi Working mum

Its not really possible to say what would be best for you to do without knowing your circumstances

Have nationwide not contacted you to put you on a better rate? they are the first port of call if not, give them a ring and explain your predicament and find out what is on offer

then, if you answer the following questions for me I might be able to suggest something

Property value
OUtstanding mortgage
Your earnings & your partners if applicable
employment status
credit status
reason for needing to reduce payments
term of mortgage
type of property

thanks

MM

humfer

Well with Nationwide you will be able to pay up to £500 extra a month in overpayments which will help pay the mortgage of quicker

As the previous posted said recommending what type of mortgage is very hard. However most 'experts' are banking on at least another 2 interest rate rises before next June so that may help you decide what to do

MortgageMamma

Actually, I read an article this morning in mortgage introducer that said only 50% of experts were predicting a rise in rates, the truth is we can speculate as much as we like but we really don't know.

Also, I think you might have misread the post the OP wants to lower payments not pay off the mortgage.

PoorDave

working_mum wrote:

hi,
My fixed rate has expired (nationwide) and I'm about to consider remortgaging. My financial situation is such that i would like to have the next 2 years repayments kept as low as poss., but then in years 3 or 4 pay off most if not all of the mortgage.

What type of mortgage am i best off considering ? I am prepared to take a degree of risk with interest rates , i.e I would be quite happy to consider tracker/flexible ?. Overall i want the cheapest mortgage possible over that timescale.

Are trackers/flexibles the cheapest over a short time, or should i be considering a different product ? Is there a good mortgage calculator that would work out the overall cost over those 4 years ?

advice appreciated, thanks

If you are totally confident of your year 3 & 4 pay off plane, what about going interest only for years 1 & 2? Not really recommended generally, but might suit your situation. You'd make no dent in the capital borrowed for 2 yrs, but if you're gonna pay most/all of it just after might be worth it.

Nationwide will give you flexble options on their calculator

working_mum_3

Thanks for those replies,

can someone clarify for me the following :

on the examples given in the post below, if i start of on a apr of , say , 5% for 2 years , then it increases to the banks variable rate, then the overall cost for comparison is based on the initial rate plus the std rate for the rest of the term . CORRECT ????????

I take it that this overall cost for comparison is based on a 25 year mortgage ????? If the mortgage was taken over, say 10 yrs, would the cost for comparison be affected ? i.e lowered ?


thanks

MortgageMamma

Hi Working mum

you are correct in what you say but the overall cost for comparison figure is really useless and not worth bothering with unless you stay with the same lender for the whole term of the mortgage and the standard variable rate that you go onto and stay on remains the same consistently!

Calculating your costs for the amount of time you wish to remain with the lender (normally just the incentive period) is a better option and also keep an eye on the balance of the mortgage after the same amount of years on each quote, you will find this on the last page on a key facts document

Kind regards

MM

working_mum_3

Thanks MM - a clear and concise answer.