remortgage advice

koojo

I am 10 months away from completing a fixed rate deal with Principality paying 5.49% and have been approached by a broker (TotalMortgageNetworks) to remortgage now at a less rate of 3.54% 2yr fixed with abbey incurring a 3% redemption fee of £2700..
It would be consolodating an existing loan and adding a further £5000 to the mortgage... but new repayments are calculated to be lower than what we pay at the moment and the mortgage duration will not change

Would this be wise to pay the £2700 so close to the end of the deal??

dimbo61

Have you taken into account all the other costs to move lender ? I think you would spend the next 2 years repaying all the costs!

Crashandburn

Main question is will you make back the £2700 over the next 10 months...........or say 8 months if it takes 2 months to go through. Add on that a £999 fee for the new deal and its a lot of money to make back over a very short period of time. Whilst it may sound good on a monthly basis, it could cost you in the long run. £2700 added to a mortgage over 25 years can almost treble!

If you wanting to tuck up your other loan, then get Abbey to do it at 4.99% SVR which leaves you free to renegotiate the whole lot come early next year

koojo

Thank you people for the advice... I suppose it is a kinda "no brainer" but I needed it spelt out. The broker is NOT all of the market and the "lifetime" arrangment fee calculates at 1.9% ...

dimbo61

So that 1.9% on top as a fee plus legals, survey,exit fee and other costs!!!
Sit tight and look for deals in a few months FD and other lenders allow you to book a deal upto 6 months in advance