Would like to fix for 5yrs - best deal?

Ivrytwr3

Hey all,

We bought a property in 2005 and were on a 5 year fixed - this expired in Dec 2010.

We then sold that property and bought another in Oct 2010 at a higher price. We ported that mortgage and got another to cover the full price of the property at 85% LTV.

So we now have 2 x mortgages for the same property (with me so far?!)

Loan Amount: £145,562
Repayment Term: 25 years.
Repayment Method: Repayment
Purchase Price: £171,250

Thismortgage is provided by Alliance & Leicester plc.

Part 1 of 2

Loan Amount: £69,955.00
Repayment Term: 25 years
Repayment Method: Repayment
Initial Rate Payable: 4.24%
Product Description: Porting Lifetime Tracker
The Base Rate Tracker rate is a variable rate which is 3.74% above the Bank of England base rate,
currently 0.50%, for the remaining term to give a current rate payable of 4.24%.

Part 2 of 2

Loan Amount: £75,607.00
Repayment Term: 19 years
Repayment Method: Repayment
Initial Rate Payable: 4.54%
Product Description: 5 Year Fixed Rate
The fixed rate will be 4.54% and will end after 3 months. (Fixed until 31st December 2010.)
When the fixed rate period expires we will charge interest on the money you owe us at
the following Base Rate Tracker rate, which is a variable rate which is 0.75% above the Bank of
England base rate, currently 0.50%, for the remaining term to give a current rate payable of 1.25%.

We are now looking to fix the first part of the mortgage for 5yrs. It is 85% LTV with Santander.

Any advice on what mortgages are out there at the minute? Or what you would do in our situation?

(we really are mortgage newbies )

Thrugelmir

To clarify. You have one mortgage on your property with 2 sub accounts.

Once you remortgage Part 2 of 2, the low interest rate will be lost forever. Unlikely that we'll see .75% above base on tracker mortgages ever again in fact..

This leaves Part 1 of 1. Leaving Santander is not an option. So see if any better rates are available to you. May also be worth making overpayments on this account to reduce the balance if you can afford to do so.

Ivrytwr3

I'm confused. I want to keep the second mortgage, as you say the rate is low) and only change mortgages on Part 1. Can i not do this?

So if i do remortgage, i will have to remortgage the whole lot? If so, then i would be better leaving the mortgage as it is and making overpayments on Part 1 (as you pointed out). Is that correct?!

kingstreet

A remortgage is the process of moving your whole mortgage to a new lender on a new rate. What you want to do is ask your current lender for a product transfer on one of your sub accounts only.

See what they'll offer you for a transfer of part one, leave part two alone.

Thrugelmir

Ivrytwr3 wrote: »

I'm confused.

The mortgage is actually the legal charge placed on your property by your lender to secure the monies owed.

Although commonly called mortgages, the 2 products you have are just regulated loans. You could have 20 sub accounts with varying interest terms, but they would only be secured with one mortgage on the property.

Ivrytwr3

OK an update! I did as recommended and am making overpayments of £150 per month since Oct 11...or i thought i was!!

I have just received my mortgage statement and find that the details they gave me to set up the standing order has had me paying the £150 to the 1.25% interest mortgage an dnot the 4.24% one!!!

What on earth do i do now?!

kingstreet

A call to the lender to tell them they've set the overpayments up incorrectly and to re-cost the two accounts back to the start and allocate the payments correctly this time?

Perhaps even put it in writing so they can see what you want to happen in black and white?