which mortgage? halifax rip off?

cv65user

my and my partner have salary £20k each so £40k income before tax.
student loans about £30 each so £60 pcm
Credit cards abouts 200 per month each.

We are getting help of £100k from parents so need about £80k mortgage as house is around £180-190k .

We bank with halifax so went there and asked for a fixed 80k mortgage , £2k fees not included, about £300 pcm over 34 years at first . so repays about £120 over the course!! my jaw nearly hit the table even though it allowed up to 10% overpayment.

So I asked her to do the same again, but over 20 years. It became a bit more suited to me about £450-500 PCM.

Then she tried to flog PPI 50 each per month which would have brang it to about £550-650 per month.

She also advised me to consider house insurance which would be about £40 per month. The paper work qoute says that the rate is a 2 year fixed which will average something like 3.19%.

Is this good or not ? Today i AM GOIng to HSBC as they got 2 years for 2.64% which will make a considerable difference.

Dave_Ham

I am not 100% sure what the question is..

You went to Halifax and they gave you their offer and now you are going to HSBC to see their offer??

HSBC will be better rates and they are more selective, but your sounds straightforward.

Think you are wasting your time going to the meetings, you could have seen rate in advance.

If you meet HSBC criteria, you are unlikely to beat their product.

Never take any insurance from the bank though, they are typically tied to their own and therefore cannot offer best value.

Good luck

betmunch

At 2 times your income I think even HSBC would be hard pushed to turn you down, even with the credit cards and student loans, still you never know.....

As Dave says if they take you on then grab it.

Definately dont take insurance from the bank, if you want insurance get it sorted by a professional, not a bank salesman.

cv65user

sorry what I wanted to know is whether is 3.20%? Is OK,. Just that when I told woman the deposit she said you will get a great deal.

But when I saw that borrowing £80k pay back £120k my stomach didnt feel good lol. When I went to HSBC i saw a 2 years at 2.64% .

And thats for a random new customer. So am I wrong to assume I will get a lower rate (lower then 2.64% ) for putting down 45% deposit?

nomoneytoday

cv65user wrote: »

But when I saw that borrowing £80k pay back £120k my stomach didnt feel good lol. When I went to HSBC i saw a 2 years at 2.64% .

The joys of compound interest, and long borrowing.
When my parents took out a mortgage the rates were in the teens, so each £1 borrowed became £4 paid back over 25 years :eek:

cv65user

I also saw that I am allowed to over pay with halifax up to 10%. Im sure it had a summary where if I was to keep overpaying the max allowed. I could pay it off in say 10 years. so I;d pay back a total of £88k on £80 mortgage meaning £8 interest which I would feel is acceptable.

But I do not know whats good or wrong - this is my first mortgage

latecomer

Sounds like you need to do more research on mortgages - and compound interest as above.

The rates advertised for a mortgage are generally not variable - you get the best deals with the highest % deposit (relative to the house value) but will probably also need a squeeky clean credit history. You wont get a better deal than advertised.

latecomer

cv65user wrote: »

I also saw that I am allowed to over pay with halifax up to 10%. Im sure it had a summary where if I was to keep overpaying the max allowed. I could pay it off in say 10 years. so I;d pay back a total of £88k on £80 mortgage meaning £8 interest which I would feel is acceptable.

But I do not know whats good or wrong - this is my first mortgage

Have a look at a overpayment calculator :

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

And play with the numbers. Basically if you pay off the capital that you owe at a faster rate than you originally agreed then you save on the interest you pay back. You need to ensure that the maximum amount you can overpay is clearly stated as if you go over that then you may incur penalties.

cv65user

latecomer wrote: »

Have a look at a overpayment calculator :

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

And play with the numbers. Basically if you pay off the capital that you owe at a faster rate than you originally agreed then you save on the interest you pay back. You need to ensure that the maximum amount you can overpay is clearly stated as if you go over that then you may incur penalties.

thats what I used.
i put 80k
on a remainder of 20 years
rate at 3.19
repayment
recurring payment of 500,.

results

Overpaying would save you
£17,795 in interest alone,
and mean you pay it off in full
12 years and 1 month earlier.
You repay £451 per month (excl. Overpayments)
Assuming your interest rate stays the same
If you overpay, the total you'll repay, inc. interest & fees is £90,524

so is that saying I am paying 451 pcm (sound about right) + 500 recurring overpayment. means I pay back 90k on 80k mortgage?

sorry i feel so dumb

sammyjammy

cv65user wrote: »

thats what I used.
i put 80k
on a remainder of 20 years
rate at 3.19
repayment
recurring payment of 500,.

results

Overpaying would save you
£17,795 in interest alone,
and mean you pay it off in full
12 years and 1 month earlier.
You repay £451 per month (excl. Overpayments)
Assuming your interest rate stays the same
If you overpay, the total you'll repay, inc. interest & fees is £90,524

so is that saying I am paying 451 pcm (sound about right) + 500 recurring overpayment. means I pay back 90k on 80k mortgage?

sorry i feel so dumb

Don't feel dumb, you do need to d oyour homework tohugh so that you understand how mortgages work and what you're getting yourself into.

Have you considered a longer term fix? It may not be right for you but two years is a very short period of time and you have no clue what interest rates will look like at the end of that period.

The 10% overpayment for Halifax is 10% of the balance of your mortgage so you wouldn't be able to overpay £500 once the balance goes under £60k.

sammyjammy

Have a read of this, its supposed to be very useful http://www.moneysavingexpert.com/mortgages/mortgage-guide