£20,000 remorgage advice!!!! Please

carlos1234

Hi..my current fixed rate morgage deal ends in feb 2011 and I am looking to remorgage for £20,000. i have 7 years left on my initial morgage but would like to get this down to "maybe" 5 years ..if i can find a deal with little or no arrangement fees. any advice would be greatly appreciated as such a "small" amount i.e.20k makes finding deals harder..especially if arrangement fees are high. maybe I should forget the fixed rate option and go onto the variable rate ??? this seems to be the cheepest option for the time being ..oh what to do??? thanks in advance :T for any advice..carlos

Thrugelmir

carlos1234 wrote: »

..if i can find a deal with little or no arrangement fees.

Unlikely that you'll find such a product.

What SVR do you move onto when the fixed term expires.

Pal

Just a thought but you might be better off going for a larger mortgage with an offset facility if it has a better rate. E.g. borrow £30k at a better rate then put the £10k spare into the offset so that you don't pay interest on it.

You just need to be able to afford the repayments on £30k instead of £20k, and the willpower to avoid spending the £10k!

I suspect you are going to have to pay an arrangement fee though.

carlos1234

thanks for your posts thrug and pal...not sure what SVR i will move onto next feb.. that depends on how high above the Boe base rate the nationwide is operating at at the time..could still be relatively low compared to a fixed 4+% rate and set up fee...especially on such a small amount ... also have never borrowed more than i need i.e. 30k as apposed to 20k ..(fair point though..that i could possibly find a better deal that way) just want to try and get it off my back without ..as you pointed out the temptation of money sitting there for the taking. thanks again for your thoughts as very much appreciated:beer:

HappyMJ

Do you really need to remortgage? What's the rate? Even if the rate is high at 5% the annual interest is only £1,000. You simply aren't going to find any better deals. So leave it as it is and just make overpayments to get the term down.

getmore4less

£20k 7 years with Nationwide so the SVR is likely to be the BMR of 2.5% max 2% above Base tracker which is a good.

Any new deal will follow on the 3.99% SMR not tied to base.

So the current deal probably has this OK/good followon rate.

Asuming the LTV and salary multiples are fine then you can get the best of the rest but it will be hard to find.

Looking at the nationwide existing customer deals 20k on a 100k house it only offers a 2 year fix at 3.39%

What you have is better allready than nationwide seem to be offereing.

FD offset tracker might squeeze a bit off the rate but there will be fees.

If you are on this BMR(base+2%) I really think you will be hard pressed to find a deal that will save enough to be worth going for unless you want to fix for the 5 years you plan to try an clear the mortgage

How much can you afford each month?

£20k over 7 years 2.5% is £259pm
£20k over 5 years 2.5% is £359pm

I would stay with the 7 years and overpay when you can.

Engeroosi

Just pay it off before interest rates start to rise above 5%, not sure of your circumstances but 20000 shouldn't take that long to clear, 3 years max!!

Thrugelmir

Engeroosi wrote: »

not sure of your circumstances but 20000 shouldn't take that long to clear, 3 years max!!

Depends entirely on disposable income.........

£20k may not seem much to you.

dimbo61

You have not given the rate you are paying now or your current mortgage payment but if you can just set up your Direct debit to pay at least £359 a month and you will be overpaying the mortgage every month and hopefully mortgage free in 5 years without spending a penny more than you need to!
Unless you can pay even more each month ? but at 2.5% you should also consider cash ISA,s as long term savings

carlos1234

the coventry building society has a 5 year fixed rate at 4.49% with a £195 booking fee (no other arrangement costs) and the option to overpay 1k or 5% per annum..???. so this fixed rate option along with a direct debit for the overpayment seems very tempting..the 4.49% rate is not much better than my current 4.79% but anything with better rates seem to be costing around £999 . just need to get it payed off in time for my daughters to decied to head off to university...:o thanks for all advice and thoughts..very helpful..hip hip horray for martin lewis:T

carlos1234

as you rightly pointed out "Depends on disposable income" ..20k is still 20k to have to pay off..whilst my car etc is running on borrowed time! ..cheers ..carl