First Time Remortgage Advice? (with a little rant)

Gareth83

I'm coming up to the end of the fixed term on my first ever mortgage with Santander and need some advice/pointers.

I took out a 35yr repayment mortgage fixed for the first 2 years to get me on the ladder basically and I have been paying £470 a month, it will now drop to £386 a month which seemed great at first but it is on Santander's SVR of 4.24% and let's face it a 33yr term remaining sucks.

I rang them up and checked my options based on a 23yr mortgage:

Borrowing £83,000
Value of House is £115,000
LTV: 72%

Anyway on a 2yr fix they can offer me two options:

1. 4.69% fixed = £487.84pm + £899 fees
2. 4.99% fixed = £501.83pm + £100 fees

or on a 2yr tracker:

3.49% + BR (currently 0.5%) was around £470pm + £399 fees

Anyway based on that I worked out over say 2yrs the best deal for me is the 4.99% rate with least fees and then consider switching. Good stuff I thought as I would have dropped 10yrs off my mortgage.

Until I checked a few comparison sites and Santander do much better rates for new customers even for those remortgaging to them. Best rate would be ~£440pm using same figures. I rang up to complain and see if they can better that or at least match but they said it is to entice new customers!!! !!!!!!?? I thought this was only the tricks of the mobile phone suppliers, jeez I am nieve!

Anyway the best option for me is Woolowich from Barclays at 3.57% on a 2yr fix for around £440pm which saves me £2000 over 2yrs but then the hassle of switching etc.

Any suggestions and why don't companies try to keep your custom these days???

Should I just stick on the SVR for now and just overpay as much as I can??

Gareth83

forgot to add income is £22k salary + ~£3k other ventures

kingstreet

Introductory shagpile.

They'd rather see good customers head out the back door than offer them similar deals to the new ones they have no idea will be as good.

I've always thought this approach a little nonsensical.

You can do as you suggest with the overpayments, or look for a deal with a new lender. Stick to deals with no transfer costs or arrangement fees as the impact of these is greater than the rate on relatively small mortgages.

hcb42

banks do it, phone companies do it, insurance companies do it. either you remortgage with them or vote with your feet, but there will always be introductory customer discounts, whether we like it or not unfortunately.

I went with Woolwich recently, hassle wasnt that bad, although obviously a lot easier to stay with lender.

Gareth83

woolwich seem the best, is it worth me signing up and reducing my term to say 20yrs or just leave at 33 and overpay?? Either way would mean paying off at the same time but wouldn't mind a little element of flexibility.

Also, I guess a fixed rate is probably a good idea seen as they can only really go up?

mustang1

Change. I've completed all my Woolwich remortgage paperwork and they have been a breeze to deal with. Everyone says that it's a hassle to change but if it saves you money, it's not a hassle!! Surely the whole point is to pay the least amount possible on your mortgage and save money.

Gareth83

were you a barclays c/a holder? which package did you go for?

do I leave at 33yrs and overpay though or stick to 20 or whatever?

hcb42

Hubby had a C/A with them, which we have now made joint.

I forget the name they give them but basically they are offers to entice people to switch and have no arrangement fees. We got £300 for being account holder which was nice bonus not to be paying it out for a change.

I personally would shortern the term, as I dont think i could live with a 33 yr hanging around my neck, and it forces you to pay - assuming you can afford it. If you dont, it is too easy to fritter that money away. mine is 15 yr term now, but I intend to overpay to get it down to about 13, if we dont move and downsize in meantime, which is the bigger plan.

Our LTV is about 40-45% so it would have been one of their most competitive rates.

Gareth83

how did you apply? online or in branch?

hcb42

"Great Escape" mortgages rings a vague bell.

We applied over the phone. Hubby had initially made a branch appt, but the delay was about ten days as we needed a weekend, so we made a telephone appt. It took about an hour or so, then pack came out and we took it frmo there. Never went in branch other than to take my passport in to validate me as it were.

mustang1

I got a broker to apply for me - i didn't pay them anything but Woolwich paid them commission. I'm with Natwest at the moment but went with their 70%LTV offer with £999 fees - 3.355. I'm currently on 5% with Natwest so I kept my repayments the same as my current mortgage and shaved 9 years of the term. The term is up to you. I was happy to stay at my current monthly repayment but you might prefer to have a higher term and overpay (they let you overpay by 10%). Depends on how much you have to spare at the end of the month but I agree with you that reducing from 33 years would be good if you can manage it.