Fixed mortgage coming to an end in 2 parts.

nick_rogers24

Hi all,
Sorry if this question seems simple but I cant seem to find the answer anywhere.
We have a mortgage which is in 2 parts, We had a fixed mortgage for 5 years on our old house but we moved 3 years into the 5 year fix, so for the extra borrowing we took out a new product on a 2 year fix. So we have, say £50000 where the fixed product is ending next Jan from the old house and £120000 where the fixed product is ending the end of this month. On the £50000 we only have 15 years left to pay it, but on the new £120000 its over 28 years.
Because the interest rate has dropped since we took out the fixed option we will save about £100 per month once we transfer to the variable rate. what I was planning on doing in January was combing them together to get one product at the same rate, but because of the 15 year and 28 year difference will this be the wrong thing to do? Will it mean over the long run ill pay much more on the initial £50000 or am I thinking wrong? should I keep them seperate??
Any help would be greatly appreciated.
Many thanks
Nick

getmore4less

As long as you keep paying the same amount then it should make no difference.

What is important are rates and the followon rates on these deals what are they?

What are the size of each bit?

What are the max overpayments on the one that continues till Jan?

whats the LTV

nick_rogers24

Hi thanks for the reply, I just had in my head that if the one part is £50000 paying that back over 28 years will incure more interest that 15 years?
the £120000 is going from a 6.04% to the variable of 4.99% and the £50000 from a 5.95% to the variable of 4.99%, but then if I get a product for £170000 they will be on the same.
Not sure on the max overpayments?
The house if worth £250000
Cheers

getmore4less

nick_rogers24 wrote: »

Hi thanks for the reply, I just had in my head that if the one part is £50000 paying that back over 28 years will incure more interest that 15 years?
the £120000 is going from a 6.04% to the variable of 4.99% and the £50000 from a 5.95% to the variable of 4.99%, but then if I get a product for £170000 they will be on the same.
Not sure on the max overpayments?
The house if worth £250000
Cheers

You will pay more interest if you actualy pay less monthly but if you keep the payment at the same level as now then it makes no difference in the end.

I would start looking now for a new mortgage now 4.99% SVR is not good.
£170k on £250k is LTV of 68% so 70% LTV products are your target.

How tight is the budget do you have to fix? ( probably not see below *)

£50k over 15y @ 5.59% is £421pm
£120k over 28y @ 6.04 28years is £741pm
So £1162 to throw at a new loan.

eg : First Direct 75% LTV tracker 2.89%(base+ 2.39%) £170k @ 1162pm is a term of 181 months 15years 1 month( so you can actualy bring the 28y bit down to 15y rather than the other way round).

FD LTV at 65% (£162.5g) gets a new rate of 2.39 you reach that in year one (£160,848.41) and if the fees a re still low a remortgage to the 65% product and the term comes down to 174 month 14years 6 months

If you take the 2.89 product out over say 25years you have a payment of £754, with the rest of the £1162 an overpayment, rates would have to go up to 7.25%(base at 4,86) before the payment reach the current level(*fairly save I think) and with the early overpayments you will be able to take even higher rates and still keep the payment below 1162. If you went for the offset you could even staore up these overpayment to help out if rates did rise a lot.

Ok rates are variable but overpaying can mitigate any rises very quickly.
FD 5y fix is 4.39% a term of 210 months 17y 6m but afterthe 5 years you are on a higher SVR of base + 3.19%

nick_rogers24

Thanks very much for the info, very helpful. I hope these rates stay low so we can reduce the years off.
Many thanks

Nick

Thrugelmir

nick_rogers24 wrote: »

should I keep them seperate??

Two mortgage sub accounts. Potentially could mean 2 sets of product fees........

ginvzt

If the mortgage is ending in January you can start the process now - it will take a few weeks to get the new deal sorted and the offer is valid for a few months usually?

We are getting our mortgage (buying house) with FD, and we got offset tracker. I have to say, the customer service was fantastic, and i had to talk to them quite a few times about transferring my accounts and mortgage.