First time Re-mortgaging

fleenio

Hi All,

I purchased a house worth 110k in Apr10 took out a fixed rate mortgage with Lloyds TSB at 4.39% for 2 years. This came to an end on 31 March12 and I'm now on the SVR at 2.50%. Initially i was going to leave this for some time until interest rates started rising again, however I have read on the news recently that mortgage interest rates have started rising again.

Lloyds have offered me a remortgage deal of 3.49% fixed until Aug14, without the hassle of a new valuation and new product fee and having to apply to other lenders. After the deal ends I would move onto the homeowner rate of 3.99% rather than SVR.

My questions are:

1. Do you think I should stay on the SVR a bit longer to see what happens? Although I suspect the only way is up for interest rates.

2. Do you think the Lloyds remortgage offer is a reasonable good deal? Bearing in mind I could be doing without the hassle of getting valuations, etc from other lenders (BTW I only have ~29k remaining on my mortgage).

3. Im not really sure how the re-mortgage works, if i was to move to another lender, would the process be as difficult as it was trying to get a mortgage in the first place. (payslips, valuations, etc).

Hope I have made some sense, my brain is pickled with remortgaging info lol.

Thanks in advance.

Thrugelmir

You are moving onto a good rate i.e. base plus 2%. Stay with it.

Remortgaging to another lender will incur you all sorts of costs that you won't recover.

Lloyds want you off the 2% rate. So while the fix may appear attractive. Check the follow on rate.

You are better off either overpaying or saving the difference until BOE base rate moves upwards. This may be some years away. As there is a disconnect between the BOE and market rates.

Markets rates are moving upwards as the credit bubble unwinds. So think yourself extremely fortunate to have the product you do.

HAMISH_MCTAVISH

Stay on the SVR rate.

Lloyds would love you to leave it and go onto a worse product, which is exactly why you shouldn't.

You have a good product that is guaranteed not to rise unless the base rate does.

It's as good as you'll get in this market, and base rates are unlikely to rise for quite some time.

fleenio

I've stayed with the SVR. Had a few should i or shouldnt i change over moments especially when I saw RBS and Halifax had increased their rates. As far as im aware Lloyds have not increased their rate (cant see it online) and I have not recieved any correspondance from them. So think I will stick with it a while longer.

Thrugelmir

You can earn over 3% in an instant access ISA. So worth putting money aside that could be used to repay the mortgage if interest rates were to rise.