Remortgaging soon, advice welcomed

Dr_Wu

Hi

We have around 48K left on our mortgage, the house having a value of around £230K

We are coming to the end of a 2 year fixed term mortgage (3.99%)with the Britannia in 6 months and the early redemption fees would be around £450. The mortgage currently is due to end in Aug 2015 and we are paying £1009 pcm (repayment)

We would like to remortgage soon (don't mind the early redemption charge) and also hopefully up our payments/pay off the mortgage a bit sooner, maybe aim for Dec 2014 rather than Aug 2015. We could probably afford around £1400 pcm.

Any suggestions what the best product to meet our needs might be. We were hoping to avoid big arrangement fees and noticed Woolwich/Barclays do a couple of fixed term mortgages with no fees. We were hoping to go for at least a 2 year fixed being mindful of likely rises in interest rates. The best our current lender the Britannia seem to do is either 4.89% (3-year fix) with no fees or 4.29% with a £999 fee (ouch!).

Basically I'm just looking for any advice regarding products or pointers as to what we should be looking out for.

Cheers

Thrugelmir

With a low LTV you may find HSBC have mortgages suitable for your circumstances.

With a mortgage balance of £48k and dropping. The impact of increased interest rates are fairly minimal. So I would go for a product such as a tracker rather than fixed.

Read your current product details and overpay your existing mortgage product over the next 6 months as well.

1mozzie

I've just had a nightmare remortgaging with barclays/ woolwich, mainly because there is a slight variation on my address and they would not accept an explanation and messed up my application in a massive way. So beware their customer service is shocking- Avoid at all costs- you have been warned!

Burridge60

Dr_Wu wrote: »

(don't mind the early redemption charge)
Cheers

This amounts to just under 1% annual interest on your mortgage so isn't insignificant.

With such a modest mortgage compared to many other posts on MSE. Do you need a fixed rate as a 1% rise in rate will only cost you a little more than the ERC you say don't worry about.

getmore4less

I would look seriously at a low cost low rate tracker and overpay.

HSBC 60% special at 2.29% pay the loan off in 3 years or a bit more if rates go up.

unlimited overpayment, tiny fees

https://mortgages.hsbc.co.uk/product/A001001480001001481001001482-lifetime-tracker-special

Dr_Wu

Thanks for the replies, that's really useful.

Didn't fully appreciate the modest impact increases in interest rates will have on the relatively small mortgage.

Might just wait 'till the summer (we can overpay up to £499pcm at the moment), avoid the ERC and then bung as much into a tracker (HSBC one looks good) as we can to clear it off asap.

Thanks again

dimbo61

First direct have a 2 year fix at 3.49% fee£99 and also a 3 year offset fix at 4.29% fee also £99 might be worth a look
Just for interest the 2 year fix over a 3 year term for £48K works out at £1406 a month

getmore4less

To expand the costs a bit.

At about a 3 year term and £1400pm £48k

2.29% £1381
3.49% £1406.

the rate to have just one extra payment at the £1400 level(3 years 1 month) 4.88%

The advantage of the tracker is you can have a longer term(so a safety net of a smaller payment) without penalties.