Offered 95% remortgage, is this deal good?

geoffsnake

Hi, ive been offered a 95% remortgage-was 90% when i brought it last year on a 5.49 variable, and the new rate is 5.69 fixed for 3 or 5 years with no fees, so not alot of difference, is this a good deal?? New to all this morgage stuff so just want other opinions!

Thanks!

geoffsnake

New rate 5.79 sorry!

Burridge60

Seems to be very generous. Did they give a reason why its now 95% and not 90% they re assessed your value?

The no fee part is worthwhile.

geoffsnake

yeah they said the value has dropped slighty since i brought it last year for 150k(15k deposit), i cannot go to any other lender as the missis has gone part time now so wont get another mortgage, but they dont do any checks they will simply transfer it to the new deal as i have always paid on time. They did fleece me when i took the mortgage though as i was completly stuck and ended up paying £1495 to get the variable mortgage! with chelt and glos!

geoffsnake

oh they did offer me a 5.29 2 year deal but with a £999 fee! so i said defo no to that!

dimbo61

You have a poor LTV of 95% and your OH is now part time, there are no fees and you pay nearly the same amount as now with the security of a 5 year fix while your child/children? are young.
I would take the 5 year fix and try IF possible to overpay each month and in 5 years your LTV could be under 75%.
The variable rate has only one way to go and thats UP!

Burridge60

So your rate is going to be 2.50% soon?

Whats the cost going to be at 2.50% versus the cost at 5.79%?

geoffsnake

yeah jobs are hard to find round here! will hopefully have a full time job in the next month, and have 2 kids so yes i want the security really!

Overpaying will be fine once the missis goes full time and thats what i want to do, is it better to fix for 5 years as in my eyes i expect the economy to still be in poor shape in 3 years time?

and nope im on a 4.99 above base, variable with no get out fees, hence the large fee for taking it out!

Burridge60

Security of payment = fixed rate and a two year deal just puts you back staring at variable in 24 months time.

If you have your mortgage offer handy have a look at what the follow on rate is. Your rate now might be 4.99% above the BoE base rate but I hope that you revert to the Cheltenham and Gloucester variable rate at the end of that period which is guaranteed to be no more than 2% above BoE base rate.

I think you have answerd your own question as this is only marginally higher than the tracker rate you are now on and one BoE base rate rise puts you above the Fixed Rate you have been offered!

geoffsnake

After the 3 or 5 years it reverts to home owner variable rate which is currently 3.99% so presume its 3.49 above base?

I think my initial agreement was 4.99 above base for the life of the mortgage, or will it drop after a few years? will go and dig it out now.

Burridge60

AHHHHH

So your current deal cost you £1,495 to get a variable rate and you gave up a rate which is now at 2.50% as you moved and this all happened after 1 June 2010. Instead you got a 5.49% which reverts to 3.99% but has the ability to get out of it penalty free? And now want to consider a fixed rate.

Have I got that right ?