YBS 2 year fixed, no fee, 2.99%

springmb

Hi

I'm currently on a fixed mortgage rate of 5.68% with 20 months left to go. There is £90000 left to pay and an early repayment fee of 3%.

I have seen a mortgage deal with YBS for 2 years fixed at 2.99% with no fee. I've calculated that it would be worth our while switching. Can someone advise if i have calculated correctly?

Thanks

Joe_Bloggs

What does MSE Martin's Ultimate Mortgage Calculator say ?
J_B.

The_Palmist

is the ERC fee 3% of outstanding amount ?

= £27000 ???

springmb

Hi

The ERC is £2,610. I've put the figures in using the calculator link (thanks for that), and it does seem it's worth while. Is the ditch your fix calculator pretty acurate?

dimbo61

You also need to look at the rate once the fix has finished ! YBS has an SVR of 4.99%
What does your current deal revert to? can you overpay rather than pay 3% in ERC,s

springmb

We would switch again at the end of the deal and avoid the SVR. When i phoned YBS, they said there would be a £90.00 exit fee.

With the lower interest rate of 2.99% i would take the mortgage over 15 years instead of the 21 years which is left on the current morgage. Monthly mortgage payments wouldn't change but i would be incurring less interest. I am also going to over pay by £100 a month.

There is also the HSBC + 1.89% of BR tracker which is fee free at the moment, but i'd be taking a gamble on interest rates staying low for the next 20 months.

Not much experience of all this mortgage malarky, usually leave it to the other half, so thanks for the comments.

kingstreet

springmb wrote: »

We would switch again at the end of the deal and avoid the SVR

With all due respect, there are thousands of people who said the same when they took out their mortgages in 2007/8/9 but by virtue of negative equity or changes in their circumstances are now unable to do so.

The number of threads on this board alone asking for advice in getting away from top-heavy SVRs after a change in circumstances is enormous. I'm not suggesting you will be one of these people, but I'd consider paying a little more attention to the follow-on rate.

Don't forget to factor-in the valuation fee and legal costs as this deal appears to offer no "fee assistance." As you are borrowing a relatively small amount, possibly over a shortish term and on a short-term fix, are you sure you're not better off with a slightly higher rate and a totally fee-free offer? ING's 3.35% two year fix, for example?

kingstreet

On ING's 3.35% fix to 30/9/2013, you'd pay £636.79 per month based on a £90k 15 year repayment mortgage. There are no valuation, legal, arrangement or discharge fees. The follow-on rate is ING's SVR, currently 3.5%.

On Yorkshire's offer, the monthly payment is £621.09 and you'd pay a valuation fee of around £300, legal costs of perhaps £300 to £500 (?) and a discharge fee to leave of £90.

You're paying out over £800 to save £15 per month for a couple of years.

springmb

Hi

Thanks for the comments.

I'll have a look at the ING 3 year fixed product. The YBS does come with legal/valuation fees of £350.00 which would reduce any savings to be made.

Hadn't considered the SVR at the end of the fixed term. Something to think about certainly. The house is worth about £190k so don't think negative equity would be a problem (although i know never guaranteed), but i'd have to gamble that our personal circumstances don't change.

Hmm, you've given me some food for thought.....

springmb

Just one more question.

Am i right that the SVR rate is set by the mortgage lender and does not follow the BOE base rate? On our current mortgage paperwork, its says that after the 5 year term the SVR would be 2.54. I'm assuming that the SVR could be nothing like 2.54 when we come out of our deal?

springmb

current SVR is 6.99, not 2.54. My head is beginning to swim with figures!