FTB with big deposit. Good time to tie into a fixed rate for 10years?

mickym

ghaffa11 wrote: »

I am in a similar boat to you, we have just gone for the YBS 10 year fix @ 4.19%. To us, the certainty this gives us alone is worth it. If interest rates were 7% say (although seems unlikely) we would not be able to pay our mortgage. Furthermore, historically a 10 year fix at 4.19% is amazing value.

We initially applied for the 4.99% but as rates have fallen we have been lucky enough to switch to the lower rates although we have had to pay 195quid each time. Goodluck

Did you go with the one with Fees or non fees?

Fee based one is 4.19%
Non Fee one is 4.39%

Over the duration the non fee one only works out £150 more over 10 years. certainly helps the burden at the beginning of the mortgage. thought id let you know.

Things i found out on this 10yr deal.

1) the mortgage is portable to another property. However if you need to take out more money, it will need to be borrowed from YBS rather than another lender. You will be chrged for the additional money at a different rate to the 10yr fixed you organised in the first place.

2)There is a redempton fee at the end of the mortgage should you move elsewhere. This is £90.

3) Ok to use your own solicitor.

Hope this helps peeps here.

Thrugelmir

mickym wrote: »

Over the duration the non fee one only works out £150 more over 10 years. certainly helps the burden at the beginning of the mortgage. thought id let you know.

Better to pay the fees upfront than add to the mortgage if possible.

mickym

Thrugelmir wrote: »

Better to pay the fees upfront than add to the mortgage if possible.

being ignorant here but why?

Evilm

mickym wrote: »

being ignorant here but why?

Because if they are added to the account you pay interest on them until they are paid off raising your mortgage payments.

getmore4less

Thrugelmir wrote: »

Better to pay the fees upfront than add to the mortgage if possible.

Evilm wrote: »

Because if they are added to the account you pay interest on them until they are paid off raising your mortgage payments.

Financialy it is neutral.

You either have the money for the fees or not,

If you don't have the money you have to add the fees.

If you do have the money you either borrow less and add the fees or pay the fees

eg, £100k, £1k fees, £1k savings

Borrow £99k and add £1k fees or borrow £100k and pay fees.

So it makes no difference you will be borrowing the same amount either way

getmore4less

Fee based one is 4.19%
Non Fee one is 4.39%

Over the duration the non fee one only works out £150 more over 10 years.

what are the fees?

borrowing £115?

mickym

10YR FIXED WITH FEE

Rate
4.19% until 30/11/21

Valuation Fee £295.00
Booking Fee £195.00
Arrangement Fee £800.00
Stamp Duty NA
Land Registry Fee £200.00

+

x122 Monthly payments of £623.45

----

10YR FIXED WITH NO FEE

Rate
4.39% until 30/11/21

Valuation Fee £295.00
Booking Fee £95.00
Arrangement Fee £0
Stamp Duty NA
Land Registry Fee £200.00

+

x122 Monthly repayments of £632.05


from my calculations that makes the No Fee based one only £150 more over time.


Unless Im incorrect?

getmore4less

You also have to look at the amount owing after 10 years with the same input.

difference in fees is £900 so the two morgages are

1. £115k + £900 @ 4.19% over 25y is £624pm
2. £115k @ 4.39% over 25y is £633pm

set both payments to £633

after 122 months (Nov 20121)
1. £81,246.58
2. £82,429.48
so paying the fee saves nearly £1200 over the 10 years.

Thrugelmir

mickym wrote: »

from my calculations that makes the No Fee based one only £150 more over time.


Unless Im incorrect?

As GM4L has quoted. The difference is £1,200.

That's because the figures you have quoted assume repayment of the entire mortgage over a 25 year term.

So although the repayments are similar. The breakdown of interest and capital is different.

So yes the cash outgoing difference is only £150. But you'll still owe £1,200 more at the end of 10 years.

Lenders like people to add their fees as over 25 years earns them a lot of extra interest.

mickym

ok thanks for that.
i think i see where you are coming from!


Still going for the non fee one as it works out best for us at the moment. thanks for the help.