C & G mortgage

partan

hi all, first time posting, been looking at the forum for a while though and found it really useful.

I have a mortgage of around 70K with C&G on their SVR of 2.5%, paying £380/month and an additional £150 every month.

I have savings of £13K

Next year i'll be remortgaging to fund an extension to the house, and also using the savings at the same time.

Question is, how do I work out how much I'd save on my mortgage if I paid my savings into it for the period until I remortgage (say in 6 months time).

Thanks for any help.

anselld

You will effectively be getting 2.5% net, equivalent to 3.125% gross for a basic rate tax payer. So if your savings rate is better than that you should leave it where it is.

You could put 13k in 2x Lloyds Vantage accounts (see other threads) and earn 4% gross, 3.2% net. So that would be 0.7% better than paying into mortgage, but even then you are only about £45 better off over 6 months.

Beware when you remortgage that you presumably have a guaranteed SVR no more than 2% above base, but C&G have ditched this for new mortgages, see here
http://www.cheltglos.co.uk/mortgages/variable-rate-mortgages.html

Obviously depends what is available when the time comes but you might not want to loose that guarantee by remortgaging the £70k!

anselld

... and furthemore, if you paying down the £13k now can you redraw it on the same terms if you want to stay on the old-style SVR - probably not I would suggest!

So be very carefull !

partan

anselld wrote: »

You will effectively be getting 2.5% net, equivalent to 3.125% gross for a basic rate tax payer. So if your savings rate is better than that you should leave it where it is.

You could put 13k in 2x Lloyds Vantage accounts (see other threads) and earn 4% gross, 3.2% net. So that would be 0.7% better than paying into mortgage, but even then you are only about £45 better off over 6 months.

Beware when you remortgage that you presumably have a guaranteed SVR no more than 2% above base, but C&G have ditched this for new mortgages, see here


Obviously depends what is available when the time comes but you might not want to loose that guarantee by remortgaging the £70k!

Thanks for that, from what I understand speeaking to C & G, I'll be able to stay on SVR when I apply for the extra money for extension. (or put some or all on a new deal).
I was just checkin that i hadnt made a mistake with savings, but looks like if I am missing out on cash, then it won't be by very much.
Thanks for spendin the time explainin it.

motch

partan wrote: »

Thanks for that, from what I understand speeaking to C & G, I'll be able to stay on SVR when I apply for the extra money for extension. (or put some or all on a new deal).
I was just checkin that i hadnt made a mistake with savings, but looks like if I am missing out on cash, then it won't be by very much.
Thanks for spendin the time explainin it.

I'm thinking of changing from repayment to interest only on my C&G mortgage - anyone know if I'd still be on the 2% + base rate deal? I have good equity in the property. Would be good if i could borrow some more on the same deal too!

dimbo61

Partan I would keep the money in savings as there will be very little difference between paying it off the mortgage now and what you are getting from your savings rate.
When you need to borrow extra for the extension it will be on a different ( higher) rate so consider a fixed deal ( part of mortgage on a fixed deal and part on a variable) try and get flexability so you can overpay whichever part is more expensive.
Keep the £13K for the overspend on the extension ( IT will happen!)

dimbo61

Motch you want to go interest only and borrow more at 2.5% thanks for that only just stopped laughing but you can only ask

motch

dimbo61 wrote: »

Motch you want to go interest only and borrow more at 2.5% thanks for that only just stopped laughing but you can only ask

worth a try though dimbo61 lol

although would i be able to transfer to IO still? (and still keep the 2% + base rate) I did ask about 10 months ago and the guy seemed to think it would be ok at the C&G