Please help!

vitodelfine

Hi All and thanks for your help in advance.

I am on 5.49% fixed for 5 years with Britannia. I took the mortgage for 14 year and now I have 11 years left.

My mortgage contract with Britannia finishes in December 2012.

Since the rates for fixed mortgages are quite low at the moment, I was thinking about remortgaging for 7 years with Santander 2.65% fixed for 2 years. The mortgage would be for £70.000

Now, I have the following fees to pay;

2% early payment fee to Britannia – about £1461
Exit fee to Britannia £125

Arrangement fee of £1950 + £150 legal fee to Santander

Even though, I will pay a lot of fees, to exit and start a mortgage, I believe I will save at end of the 2 years period.

Could anyone give me some light and let me know if it is really worth it.

I could provide more details if needed

Thank you again

Peelerfart

Punch your numbers here -
http://www.moneysavingexpert.com/mortgages/fixed-mortgage-calculator

And let us know what you think !



PF

Wh05apk

You will have the best part of £3500 fees, about 5% of the mortgage, you will be hard pushed to save that over the next 20 months, personally I would overpay whatever you can afford now without incurring penalties, and review next year.

Are you sure you only have a 2% ERC with Brittania, that sounds low?

Wh05apk

Peelerfart wrote: »

Punch your numbers here -
http://www.moneysavingexpert.com/mortgages/fixed-mortgage-calculator

And let us know what you think !



PF

Be careful, that is not totally accurate, as you are on a repayment with only 11 years left, your interest element of each monthly payment is reducing quite quickly, so you need a lower rate to make it worthwhile.

vitodelfine

Yes it is 2%
Thanks

Thrugelmir

Use the fees you'd pay to remortgage to reduce your existing mortgage.

TrickyDicky101

Such high fees for such short term fixes rarely make economic sense unless the balance to be mortgaged is very high (and the existing mortgage rate is high). Yours is relatively low. Whilst you might make a small saving I would question whether it is worth your time to go into this - especially if you need to add the fees/charges to your mortgage balance.

I would try and overpay what you can on your existing mortgage.

vitodelfine

TrickyDicky101 wrote: »

Such high fees for such short term fixes rarely make economic sense unless the balance to be mortgaged is very high (and the existing mortgage rate is high). Yours is relatively low. Whilst you might make a small saving I would question whether it is worth your time to go into this - especially if you need to add the fees/charges to your mortgage balance.

I would try and overpay what you can on your existing mortgage.

Thank you All for your replies.:T I have got the money for the fees. I wouldn't add it to my mortgage.

My concern is that if I would get this money (fees) back after the 2 years period on the 7 years mortgage.
Right now, I am really excited :j about the idea of reducing my mortgage to 7 years instead of 11. Of course, before making any decision, I will check your advices. Thanks again.

getmore4less

1. £70000 @ 5.49% 11y £708pm
2. £73686 @ 2.65% 11y £644pm

Pay both at £708 for 2 years end result

1. £60,187.56
2. £60,261.57

So not a lot in it but no savings to be had.

issues. current deal ends a bit earler than 2 years so depend on the followon rate of those 2 months at the time.

vitodelfine

getmore4less wrote: »

1. £70000 @ 5.49% 11y £708pm
2. £73686 @ 2.65% 11y £644pm

Pay both at £708 for 2 years end result

1. £60,187.56
2. £60,261.57

So not a lot in it but no savings to be had.

issues. current deal ends a bit earler than 2 years so depend on the followon rate of those 2 months at the time.

Thank you! I would be remortgaging for 7 years @ 2.65% instead of 11.

getmore4less

vitodelfine wrote: »

Thank you! I would be remortgaging for 7 years @ 2.65% instead of 11.

That will change the numbers a bit in favour of staying on the higher rate as long as you can overpay.

1. £70000 @ 5.49% 11y £708pm
2. £73686 @ 2.65% 7y £962pm

Pay both at £962 for 2 years end result

1. £53,759.81
2. £54,008.22