Technique for choosing mortgage / mortgage repayment calculator

mdf14

Hi all

I am about to remortgage at the end of June, and am looking at the market now to choose who with. I always go for fixed rate (normally with a two-year tie in) as I prefer to know exactly what I'm paying each month without having to worry about interest rates.

Having given it some thought, I think the best way to decide which mortgage to go with is to add the total of the the 24 monthly payments to the capital amount outstanding at the end of the term (this will then show the true cost after adding in product fees, arrangement fees etc onto the mortgage).

Does anyone have a better way of choosing this? Would be happy to be put in my place if so:D

Also, to help me work out how much capital I will have left after adding fees etc, does anyone know of a mortgage repayment calculator which will show the monthly capital and interest payments over the life of a mortgage?

Apologies for the long post, any help greatly appreciated
Michael

MortgageMamma

Hi Michael

Have you not considered using a broker, it will take you a long time to analyse all this information and narrow down the lenders whol will take your business in their criteria. A broker has a piece of software called a sourcing system which pulls all the mortgages together and does the calculations - any good broker will show you the maths behind a recommendation and also the sourcing results

Also, what makes you go for two year fixed rates? As you are on a capital repayment mortgage, if you have to remortgage every two years, which includes fee's etc - you could find your capital balance reduces much more slowly than if you had a longer term product. There is a good tracker capped product on the market at the moment, which means it cannot go above a certain rate - it has no tie in's whatsoever and you can stay on the deal as long as you want - its well worth having a look at

MM

mdf14

Thanks for the reply MM.

Did go to a broker last time I mortgaged - though I did my research beforehand and had a product in mind. The deal he offered me was a slightly higher interest rate and also slightly higher fees to my idea - I mentioned my deal, and asked how his deal was cheaper. He didn't really have an answer - so I'm too convinced by brokers, wonder if they take the whole market into consideration.

Good point about the fees adding on every two years. I have been considering longer term deals, will bear this in mind.

cheers
Michael

MortgageMamma

Hi Michael

There could be lots of reasons your broker did that.

1. Lack of experience
2. Didnt have access to the lender who you had found - some brokers, especially those that work in places like estate agents work off something called a panel, this is a group of lenders specifically selected by their employer and they have to stick to those lenders. unfortunately there is a loophole where they can call themselves whole of market, when they are not. You mighthave been victim to this.
3.You broker could have recommended the higher rate based on the comiision he would have received.

Not all brokers are inexperienced, panelled or greedy. There are some very good and geniune ones. Where do you live?

mdf14

I live in Tyne and Wear in the North East. To be honest I'm confident enough in myself to find the best deal for me without paying an advisor (unless you know of any ways to get the advice for free?)

If anyone has any ideas on the capital / interest payment calculator that'd be very handy;)

toonfish

mdf14 wrote: »

I live in Tyne and Wear in the North East. To be honest I'm confident enough in myself to find the best deal for me without paying an advisor (unless you know of any ways to get the advice for free?)

If anyone has any ideas on the capital / interest payment calculator that'd be very handy;)

you'll find most of them are free, the lenders pay for the introduction. Your method of calculation is fine, but I'm not aware of an online repayment calculator - there must be one somewhere

I'd also consider longer term rates, unless you have a large mortgage the fees are making regular remortgaging less viable all the time

HelpWhereIcan

mdf14 wrote: »

Also, to help me work out how much capital I will have left after adding fees etc, does anyone know of a mortgage repayment calculator which will show the monthly capital and interest payments over the life of a mortgage?

an amortization calculator such as http://www.hsh.com/calc-amort.html will give you a good idea.