Help..cant get remortgage any more ??

HappyMJ

loady wrote: »

yes, its repayment.. i have just been back on the phone to yorkshire building soceity and increased the term to 33 years !! this gets me 105k of borrowing...really unsure of increasing the term though and whether i should do it.. this is what i am looking at >>

2.69% variable (BoE Base Rate +2.19%), collared at 2.69%, until 30/06/14, then our Standard Variable Rate, currently 4.99% variable, for the remaining term of your mortgage

It has a £295 product fee

I would stick with a current variable rate of 3.6%. Over the long term that will save more money than 2 years at 2.69% and a follow on rate of 4.99%. Much less stressful than remortgaging again in 2 years.

If you use your inheritance to repay the loan at 3.6% you will get an effective rate of 4.5% return. i.e no tax to pay.... You would need to find a better rate than that on the market to make a profit.

sterlingstash

You might want to look at using part of your savings to bring yourself into an affordability bracket which keeps most lenders happy and then look at a 5 year fix at some of the great rates around - similar to your current rate at that LTV. Keep back a portion of the savings so you can continue to pay the mortgage in case of unforseens (ie an emergency fund)
Having paid off a chunk of the mortgage and extended the term, your payments will come down probably below £700 (which again gives some breathing space if anything unforseen happens) but you will be able to overpay within the limits to speed up the journey to becoming mortgage free.

loady

HappyMJ wrote: »

I would stick with a current variable rate of 3.6%. Over the long term that will save more money than 2 years at 2.69% and a follow on rate of 4.99%. Much less stressful than remortgaging again in 2 years.

If you use your inheritance to repay the loan at 3.6% you will get an effective rate of 4.5% return. i.e no tax to pay.... You would need to find a better rate than that on the market to make a profit.

Have i missed something here ? was that a typo ? how is paying 3.6% over two years better than paying 2.69% or if i stay with current lender 2.75% ?

dimbo61

Does the natwest tracker allow unlimited over payments ?
2.75% is a very good rate
Is this a life time tracker ?
You have been offered £52K by one bank and £105K by YBS if you take the mortgage out over 33 years ( on my god )
I am with YBS and like them as a lender BUT I have an offset mortgage which was fixed for 5 years and then went onto a rather poor tracker ( compared to other deals available)
We have managed to overpay big style and took out our mortgage over 22 years ( I am old!) and then reduced it to 10 years.
By offsetting our savings and overpaying we have cleared over 75% in 6 1/2 years.
Be aware the SVR with YBS is 4.99% so only change lenders if you have taken a long term offset fix of 5/10 years
Only my views GOOD LUCK

loady

dont think its a life time tracker, its getting confusing now...the new offer from natwest @ 2.75% will shave about £30 off my current £1196 monthly payments, i intend to pay the £30 on top of my new monthly payments, i beleive i can over pay by 10% of the mortgage each year so £30 is well within limits

Spiggle

According to the natwest site it's a two year tracker which moves to a variable 4% after 2 years. You can only repay 10% of outstanding balance each year. The variable 4% could be muuch higher in two years time remember. Natwest state that using 2.75% for 2 years and 4% variable as a follow on the price for comparison is 3.8%.

If an assumption is made that your follow on standard variable rate (SVR) for the current deal is 3.6% then remaining with your current deal is preferable, as HappyMJ said. You will need to check but it's likely there will be no cap on overpayments once you are on the SVR.

You haven't confirmed in any of your posts what your follow on rate with the current product is going to be.

You have to see the mortgage as a longer term investment than just headline rates. Yes, 2.75% is better than 3.6% but in two years it will be 4%+ so when you combine these it is more expensive for you overall than staying where you are and where you are likely to lose any restrictions on overpayments when your current deal ends.

A quick glance at the deal you referred to on the YBS site shows they are advertising the cost for comparison of the deal you quote to be 4.6%. That's a full 1% above the assumed SVR for your current product. Plus there's a fee to buy it, plus you're limited to 10% overpayments.

Quite honestly, and I have responded to your other thread on savings/investments, with an outstanding mortgage balance of the size you have, you are far better paying a chunk of the inheritance off the mortgage and keeping enough in the best paying easy access ISA for an emergency pot should anything nasty come up.

If you genuinely feel you can overpay sufficient amounts to be rid of the mortgage in 10 years then pay off a chunk as soon as the deal ends and then overpay as much and as often as you can from then on.

Hope that helps,
Spigs

loady

your way above me on all of this..but isnt that the beauty of shopping around ?..realisticly, i would like to over pay but i probably will not, staying with my current 3.6 fixed (not sure if its available) i am gambling with the rates...they might remain stable

Spiggle

Hi loady,

We are all assuming from your first post that you are on a reduced interest 'deal' currently that is about to finish. Is that correct?

OK, so if it is correct you need to get from your existing lender what the interest rate is going to be when you finish the current 'deal'. They should also be able to tell you what the monthly payment will be on that specific rate which is called the 'follow on rate'. Also check with them if there will be any overpayment restrictions once you are on the follow on rate.

It is unlikely this will be fixed as you will probably go onto their standard variable rate (SVR).

As for gambling with interest rates, you could find yourself on one of the headline trackers for two years after which rates have risen and the 4% or 4.99% follow on rates from natwest and ybs respectively are actually 5% and 5.99%. Nobody has a crystal ball on these things.

What you can be sure of is that if you pay a lump off your mortgage capital your monthly payments will be lower (and may enable more overpayments).

When you're looking at extending the mortgage term, do bear in mind your age by the way.

The other thing you could ask about is extending the term of the current product rather than going for a new 'deal'. You can only ask.

See if you can find out what your follow on rate is going to be and if there is any possibility of extending the term on the current product. Then let us know.

Please though don't do anything rash with your inheritance (you could put some into easy access ISA now though) it could help you a lot if you use it in the right way.

Hope that helps,
Spigs

loady

folow on rates...are these something recently new ??...over the past 15 years when products have run thier course i have always gone onto the SVR..it is the same with this product as well, looking at the original agreement,the total borrowed was 138.999 and it states that on 01/07/12 the loan reverts to the current SVR which was then 4%..dont think that applies now, im really leaning to convincing my wife to let me pay off 15k of the mortgage, i really do not know enough of investments to have the knowledge to invest and make the money worth more, i am reliant on an all in one package if you like, and these, wel...they are just like people are saying about the high street bank..dont go there, on my current payments 1196, i cant really overpay..paying of a lump sum i can carry on paying 1196 on the new rate i get, i dont want to dig myself a hole, i dont really think i understand the ins and outs, interest rates, comparison rates etc just complicate things more

ess0two

loady wrote: »

I have been happily paying my mortgage for 15 years without issue, i can currently over pay comfortably and the time has come to again to change product, my current lenders rates are quite good but i found some even better rates from the yorkshire bank but they can only offer me 52,000, i went into four other banks and the stroy was the same, what can i do ?..they seem to be offering mortgages now on affordability rather than mutiples of your income which mine is 30k+ a year, because i have four children apparently i cant afford to pay my mortgage, this is madness, it seems they a just assessing everyone with a blanket cover, i can easily afford to pay more than i am right now so is there anyway round this ??..can a broker get me what i need ?

What was the original purchase price,and was this originally over 25yrs?