Mortgage Deal Fee?

Phelpsie001

My first post!

I have 123,915.15 remaining on my mortgage ... I am tied into my current 6.59% fixed rate deal for another 40 months. This is at £761 a month with only £90 being paid off the capital!! Bahh!!

SO....I am thinking of buying myself out of this product for £5000 and going onto a different fixed rate mortgage of 3.59% tied in for 2 years. This would then put my monthly repayment at £470.

This means that over the 40 months that I would have been tied into my old deal I would save £6640!! I worked this out by saying:

Current - £761 x 40 months remaining = £30,440
New - £470 x 40 months PLUS the £5000 exit fee = £23,800

I am currently buying new double glazing so the second I can find that £5,000 I think that I am buying myself out and going on the new deal!!

Does anyone have any advice for me or see any mistakes that I have made?! I am 22 and want to be mortgage free before I am 40!!

CathT

The figures seem to work in your favour. I'm sure there is a part of the mortgage calculator on here which says 'should i ditch my fix' which will probably confirm what you have already worked out.

dollarsense

I agree, use the calculator CathT mentioned.

dimbo61

what does your mortgage revert to at the end of the current fix ? and what does the new deal revert to ?
How much will you have paid off the mortgage debt over the 2 years
Use "whatsthecost" and put your figures in
Dont forget the other costs to change lenders ie legals,surveys,set up fees and Exit fee from your current lender plus the ERC

Engeroosi

How much can you overpay without incurring a fee? some mortgages allow 10% of balance, so make sure you dont get charged the ERC on that 10% of your loan,

Phelpsie001

My mortgage deal reverts to around 5% at the end of the deal....still pretty high for todays environment?

If I stay on my current deal, only £90 of the £761 is paid off my capital each month, so not much would be paid off!!

On the new deal I am thinking, £120 would be paid off each month and I can use the money (or at least some of it) to over pay each month.

I can overpay by 10% of my outstanding balance each year without incurring fees ... I am with the Halifax and even if I buy myself out of my deal, the range of mortgages and rates on offer is pretty poor especially compared with HSBC!

dimbo61

you dont give your income or LTV of your property but you need to check with HSBC if you can get the deal you want and dont forget HSBC can cherry pick the best customers for there best deals so LTV below 60% and clean credit score ETC

Phelpsie001

I have a clean credit score ... I have spoken to HSBC who stated the 3.59% based upon the fact the LTV is between 75 - 80%. I am just not earning any real equity on my house because so little of my capital is paid off each month.

My original repayments were £790 p/m but through over paying approx £5000 its reduced to £760. I need to chat to a few bank managers to understand my options though!!