7.11% mortgage please help

lotto-dreamer

Part76,

Just to apologise for directing an answer to bud-miser and totally ignoring your query on your own thread. Sorry!

Thought I'd add my thoughts to say I think 7.11% does seem very high - there are much better rates out there. Penalty is a problem but you could be better off if lower monthly payments are more important in the long run.

Although there are plenty of websites - including Martin's own excellent advice on mortgages- a magazine like "What Mortgage" can be helpful because lists of lots of different rates divided into fixed, variable etc -including lenders' criteria etc are set out on last pages- very helpful for initial comparisons to get idea of what's available. (You can always have a "free" browse at WHSmith if you're on a strict budget -lol )

tochun

Part 76,

From the sums you provided and what you have written, I deduce you are already 18 months into this mortgage. Therefore, it makes no sense for you to pay the extortionate penalty charges until after month 36 when it goes down to approx £415.

This is because the loan you have outstanding is not that large. Thus, lets say you do get a mortgage similar to what you paid in the first, the difference between the two amounts is approx £85 (£500 - £415).

You have two decisions.

1. Do nothing. Pay £500 / month for the next 18 months and then remortgage to a better rate. You would have paid an additional £85 x 18 months = £1530 + 415 at remortgage. Total overpayment of £1945.

2. Remortgage. Pay a penalty of £2800.

Thus, by doing nothing you would save about £855.

These calculations have been worked out using the figures provided and logically makes sense since your loan is not that significant.

As other people have mentioned, check to see if you can overpay and what are the penalties. If there is no charge, overpay upto the limit you are allowed. This will further reduce the cost if you do nothing.

One other note, if you remortgage now, it will take approx 4 - 6 weeks to complete. i.e another two months of mortgage. Thus, you then only have another 16 months to endure.

Last advice, when you do remortgage, start planning it after month 34. As mentioned above, this is because the mortgage takes time to arrange.

I hope this helps.

Regards,
Tochun

halloweenqueen_2

Wow - Thats good advice tochun - now why couldn't have I of put it like that!

gallygirl

tochun wrote:

Part 76,

You have two decisions.

1. Do nothing. Pay £500 / month for the next 18 months and then remortgage to a better rate. You would have paid an additional £85 x 18 months = £1530 + 415 at remortgage. Total overpayment of £1945.

2. Remortgage. Pay a penalty of £2800.

Tochun

Part 72 can i suggest a 3rd option? Phone your existing company and ask what other deals they can do for you - it may be you can swap to another rate without penaty - sometimes the penalties only apply if you are redeeming the mortgage. Certainly worth a phone call.

Tochun - now can you please explain my pension for me