01 April mortgage changes - remortgage 31 March 2011 at 1:50PM in Mortgages & endowments 6 replies 984 views

random132

My partner and I have left the renewing of our mortgage to fairly late (the fixed term has finished now so want to get something fixed before rates dash up) - we are with Santander and have called them frequently to see what their latest rates are, and they keep increasing, todays estimate was 2yr fix - 3.69% plus £799 fee. Do you think we have time to continue to look and find a broker with a better deal or do you think we should commit today ASAP with the one we have as mortgage rates are just going to increase daily esp after 01 April??
Grateful for any opinions
Thank you for reading this

kingstreet

Why is 1 April significant?

What's the property value and the mortgage amount?

Do you want a two year fix or is it all Santander are plugging to stop you looking elsewhere?

hcb42

use a comparison site for best deals quickly.

We just did 3.29% with woolwich on 2 yr fix with no fee and £300 cash back - but I think that deal has gone now.

THe rate's not bad, depending on your LTV, personally I wouldnt like the fee....especially if you have a smaller mortgage..

random132

Thanks for your replies, mortage is £177k from original house cost £245k - bought our first house 2 years ago so fairly new at this! did use the comparison website MSE recommended but the one i thought was great (Yorkshire BS 2.99% i think but had a £2k fee, which i assume should be paid off else adding to mortgage just complicates matters - taking interest into account, we have only realistically paid off £6k in two years, i dont want to add another £2k on... over 3/4 of what we are paying is paying off the itnerest...agh!)
April 01, erm stupidly i thought it might of been signifant coz of the budget etc but erm hopefully / i am glad to hear that i am wrong!
We want a fixed as cant afford the risk of variable / tracker increasing to a level we cant afford
I asked santander what the benefits of styaing with them were and they said would have to pay soliciting fees and valuation if we switch...
Apologies for sounding so dumb, I am not normally and I have tried to read up and do some reasearch before asking...but this subject completely defeats me!

hcb42

looks a reasonable deal, then based on LTV. There are better but need to be < 60% First direct doing £199 fee, but rate is 3.99 so slightly more.

kingstreet

random132 wrote: »

Thanks for your replies, mortage is £177k from original house cost £245k - bought our first house 2 years ago so fairly new at this! did use the comparison website MSE recommended but the one i thought was great (Yorkshire BS 2.99% i think but had a £2k fee, which i assume should be paid off else adding to mortgage just complicates matters - taking interest into account, we have only realistically paid off £6k in two years, i dont want to add another £2k on... over 3/4 of what we are paying is paying off the itnerest...agh!)
April 01, erm stupidly i thought it might of been signifant coz of the budget etc but erm hopefully / i am glad to hear that i am wrong!
We want a fixed as cant afford the risk of variable / tracker increasing to a level we cant afford
I asked santander what the benefits of styaing with them were and they said would have to pay soliciting fees and valuation if we switch...
Apologies for sounding so dumb, I am not normally and I have tried to read up and do some reasearch before asking...but this subject completely defeats me!

Ok. So you want to borrow £177k and you bought the house for £245k in 2009? You seem to have thought through the two year fix, but what will you do in two years if rates are only just starting to rise seriously and you are looking for a new deal? What if rates are already higher and you come out of your fix to rates of 6%?

Could you cope? Should you be looking for a longer fix?

I don't know the answer, I hope you've thought it through.

Now, the property. At £245k, £177k mortgage is 72% of the value. There's a potential problem. If you use these figures to find your deal, you'll get the "upto 75%" offers and these will look very attractive.

If you apply and the surveyor says your home is now worth £235k, your £177k mortgage becomes more than 75% and you'll lose the deal which made you choose that lender. If their next "tier" deal isn't great, you could end up having to change lenders mid-stream.

What is the likelihood of this happening? What have similar properties sold for in recent months?

Santander said you'd have to pay fees? Nice one. There are loads of remortgage deals where you get a free valuation and free legal work, so all you'll have is an arrangement fee which might be less than theirs!

Lenders, eh? Why is there no "roll eyes" smiley on here?

random132

Thanks to kingstreet and hcb42 for your helpful responses. Kingstreet has definitely given us a few things to think about - possibility of paying slightly more now but fixing for longer and getting valuation from another provider which may not necessarily be more than staying with Santander. I believe (hope!) our house is still worth about the same as think got a fairly good deal to begin with and cant a similar property around for that price...but again definitely worth thinking about as we worked hard to get the 25% deposit so want to benefit from it!!
Thanks again for your responses, I really appreciate it - a mortgage is such a large outgoing but its so easy to pay more than you should / could be due to the complexity of the system. I will keep you posted with what we end up with