Tracker, Offset or SVR

swanny65

Our current 5.04%, 5 year fix with Britannia ends on 30/07/11 and we are looking to remortgage. We currently owe £24900.00, property worth £230000.00. After 30/07/11 we revert to Britannia's SVR of 4.25% on a 5 year term.

We have acquired 200m2 of land from the property at the end of our garden. We are going to build an extension and associated improvements which I estimate will cost £25000.00. The building is unlikely to start before 30/07/11 as we need to obtain planning permission, but i am confident our application will be accepted.

I was going to remortgage now for £50000.00 over 10 years and contacted HSBC today with the intention of taking out their BoE base rate tracker + 1.89%. Unfortunately as my property, a self build by ourselves in 2002, was signed off by a Chartered Surveyor HSBC wont lend to me. The property is under 10 years old and HSBC no longer accept my Chartered Surveyor's certification - Britannia did 5 years ago.

I am now wondering whether an offset mortgage would be best as for several months we are likely to have the majority of the additional £25000.00 waiting to be used. We also have a little savings just in case my wife is made redundant, my job is secure, amounting to around £8500.00 which could be moved to an offset savings pot.

We have no other loans and should have a good credit rating. I have spoken with First Direct and been advised they will accept the Chartered Surveyor's certificate but taken no further action.

Finally i have calculated that on a 10 year £50000.00 mortgage I could afford an unlikely rate rise to 9% as i am presently (over)paying Britannia £700.00 pcm.

Tracker, Offset or wait on SVR (overpaying at £700 pcm) until building starts?
Any advice appreciated with any recommendations.

Thanks

swanny65

Bump - looking for help

swanny65

Made a few phone calls this week and this is what i intend to do.....

Contacted First Direct: Cant have an Offset with them as my salary isnt £30000.00. Mad as i have paid HR tax the past couple of years!!!

Contacted Britannia, my current lender, who have an Offset at 3.6% with a Base Rate floor of 1.0% ie BOEBR + 2.6%. I thought the simplest option, it is fee free and would take over from my fix when it ends next month. Oh no not so. Britannia wont lend me £50000.00 if I then put £25000.00 into the offset savings account awaiting building to be completed. Queried this with them and was told i would have to covert the existing debt of £24900.00 to the offset and then apply for 1, 2 or 3 draw downs, more if i want, each time i wanted more money to pay for my build. Problem here no guarantee the Britannia would lend me the money if the economy takes a down turn.

Then I contacted London and Country as Martin recommends then. The advisor was helpful, not at all pushy, and found me a BOEBR + 2.39 rate offset for two years with the Coventry Building Society for a £199.00 fee. The lender will accept my chartered surveyors certificate and i can put the build money in a savings account and offset the interest received until i use it. The only problem is i can only overpay 5% per year of the balance - so my intention to carry on at £700.00 pcm will need amended, put i still intend to put the additional payments in the savings pot.

I appreciate my circs are a little unusual but i would not have thought with a 25% LTV i would have had such problems.