Advise for re-mortgage.

ian6791

Good evening,

Looking for some advice please.

Currently owe £68,000 existing mortgage, house valuation £150,000. Was with Halifax on fixed rate, now expired and on default variable rate and looking for a new deal.

I am considering paying lump sum of £20K off, leaving me with £48K and also shortening the term to 10 years (currently 22 yrs) to pay it off sooner, but increasing my payment slightly to approx £470 per month.

I am shopping around at the moment, had an offer from Santander at 2 year fixed at 3.99%

Looking for some pointers please. Is it better to pay a lump sum off and shorten the term (although my payment are increasing) or keep the term as it is and lower the payments, or pay no lump sum off at all.

Also considering whether to stay on variable rate or to move to a fixed rate. I have been told by several bank mortgage advisers that they expect interest rates to increase very soon.

Many Thanks

CountryGirl7676

I was on the phone yesterday with Santander and they are doing a 2yr fixed - phone only - 3.49% - 2 year fixed - no fees. This is the best i have found so far but hav still a few others to check out before i finally decide which one to go with. Hope this is of some help to you :)

shortchanged_2

What is the SVR you will go on to?

holly_hobby

Best advice is to have the smallest amount of borrowing over the shortest period of time .. thereby keeping the total cost of borrowing as minimal as possible.

Of course, you should also ensure that you are left with sufficient monthly excess to live comfortably too so tailor the term to encompass these requirements too ...

Hope this helps

Holly

ian6791

Hi, thanks for the comments.

I'm on 3.55% variable at the moment with Halifax as my fixed deal with them ran out.

Santander have offered 3.99% fixed for 2 years - no costs. When this expires it will automatically go to 4.74%.

I was at Santander today and they told me that 3.99% was the best they could do. I had previously been offered 3.49% (a couple of weeks ago) but was told this deal wasn't available anymore.

dorset_nurse

Do you have to fix it? Some banks offer the opportunity to fix at any time if you feel rates are/will be going up. I think you could get a better deal if you look into those.

ian6791

Hi Dorset Nurse,

I don't have to fix it, i'm currently looking into the variable ones offered by HSBC and similar.

I know it's the million pound question, but i'm being advised by every financial advisor that I speak to that interest rates will more than likely rise shortly.

dimbo61

The YBS website keeps telling me the same thing but who could predict that the BOE base rate would stay at 0.5% for over 2 years!!!

dimbo61

If you do reduce the term then you have to pay that amount every single month but if you look for a flexable mortgage ( offset ) then you can overpay or build up savings in the offset account.
If you are going to take a fix then do it for 5 years! as rates are still available under 5%

dorset_nurse

My tracker hasn't moved at all for a couple of years.
If you get a 2 year tracker you only have to hope the rate is reasonable for one year as if it rises in the second year by a simlilar amount to the % you have saved from not fixing then you still come out winning.

CountryGirl7676

shortchanged wrote: »

What is the SVR you will go on to?

Hmmmm - don't know that??? I got the number from a leaflet in the post - it's 08000778084. U could phone and check it out if ur interested?? Sorry i can't help more than that :(

The guy on the phone said that this was a phone offer and would not be offered in store or online.