change lender before mortgage expiry

khabboo

Hi

I still have 3 years left with my current lender. The rate i am paying is very high (before the rates came down) and i'm struggling a little.

Can i change to a new lender at a lower rate?. What kind of charges will my current lender make for the opting out of the contract.

Many thanks (clueless about money)

Crinz

you will need to check with your lender (or your mortgage offer) to see what penalty you will have to come out of your deal

couple of questions to figure out if it is worth it:

how much do you owe
property value
decent credit history?
what rate are you currently on
how long is your mortgage term?

Thanks

khabboo

Crinz wrote: »

you will need to check with your lender (or your mortgage offer) to see what penalty you will have to come out of your deal

couple of questions to figure out if it is worth it:

how much do you owe
property value
decent credit history?
what rate are you currently on
how long is your mortgage term?

Thanks

Hi
owe - £130,000
Value 175000
no probs with credit history
At present on 6.5ish
23 years.
(paying approx £900p/m at present).
4 years left with current lender

It was a self cert mortgage as i can pay £900, but doesn't leave much for family.

many thanks

beecher2

What's your Early Repayment Charge and what's your income? Why were you self certificating?

khabboo

beecher2 wrote: »

What's your Early Repayment Charge and what's your income? Why were you self certificating?

I will find out from lender about repayment charge. income 30k. self cert because i knew i wouldn't get a mortgage otherwise, but wanted a house as i was in 1 bedroom with wife and kid. Also was conned out of a lot of money as the house deal was going through (by a "friend")

Doing ok as my wages go to the bills etc, wifes wages for spending.

Mortgage on my name only.

long story- been a fool- now wondering how to reduce mortgage

beecher2

I'm a bit unclear as to why you knew you wouldn't get a mortgage without self certifying, but has your position changed as you won't be able to self certify now. If you've 4 years left your ERC may well be too high for it to be cost effective applying elsewhere - will tell you the details on your mortgage offer.

Crinz

here's a handy calculator to help you make this decision:

http://www.moneysavingexpert.com/mortgages/fixed-discount-mortgage-guide#calc

probably will be worth it in your case, I have only assumed that with 4 years left with your lender you will probably have a 4% fee to pay. change this to get the right result.

Thrugelmir

Although times are difficult they will get easier in time. Having got on the property ladder hang in on there.

If you can get through to the end of your current product term. Then you will have options in the future. As over the next 3/4 years you'll start to make inroads in the balance owed.

By adding any ERC to a remortgage balance. Possibly fees as well. Any benefit gained by moving a cheaper rate will washed away as interest rates rise in the future. As it will take some years to repay the increased capital balance.