MSE NEWS: NatWest launches lowest 5-year fix as mortgage rates fall

getmore4less

skiking wrote: »

I remortgaged three years back and I found comparing providers was quite easy based on the tools they had on their websites - I'm also awkward as I have a repayment and interest only mort. Its time to renew and I'm finding it a lot harder to come up with the repayment amounts without phoning them or even worse having to go through a broker.

Its all gearing up to be anti-competitive by making it harder to compare and forcing you to engage personally with the banks where they can use gentle persuasion tactics. I love Bankers!

That will not tell you the answer you need.


As long as you have the interest rate and the fees you can work out the rest.

skiking

getmore4less wrote: »

That will not tell you the answer you need.


As long as you have the interest rate and the fees you can work out the rest.

Why ? If I know the monthly amount payable then multiply that by the duration of the fixed period and add on any fees then I know the total amount. Banks calculate their interest differently from each other

gt94sss2

Thrugelmir wrote: »

Would you prefer the business to go to a state owned bank or one owned by overseas investors (i.e. HSBC).

HSBC - apart from the fact its HQ is in the UK and it has plenty of British shareholders, its also not taking part in this government scheme as it can afford to offer such rates without government help - which means my money as a taxpayer isn't at stake..

Regards
Sunil

getmore4less

skiking wrote: »

Why ? If I know the monthly amount payable then multiply that by the duration of the fixed period and add on any fees then I know the total amount. Banks calculate their interest differently from each other

You are missing the amount owing at the end of the fixed period they will be different.

JimmyTheWig

skiking wrote: »

Why ? If I know the monthly amount payable then multiply that by the duration of the fixed period and add on any fees then I know the total amount. Banks calculate their interest differently from each other

Because the amount you repay (i.e. the amount your mortgage balance goes down by) over the period may be different.
[Cross posted with gm4l.]

skiking

I have to admit I would have expected the amount owed to be reduced by similar amounts (not to the exact penny) irrespective of the interest rate as the whole point is that a repayment mort. is calculated to clear the interest accrued and clear the amount loaned within a set period. Endowment is slightly different but again, the monthly payment is supposed to clear the interest leaving the original loaned balance (give or take a bit) to be cleared by the product taken out to clear the original value.

SG27

getmore4less wrote: »

In my case I would be better off taking no fee product at 3.69% than this. Is a bit of con really. You'd need to be taking out a seriously big mortgage for that to work out cheaper than the already available HSBC no fee 3.49%. So basically it's not a cheaper mortgage at all as there a far better ones that have been around for ages!!

depends what you mean by seriously big

break even after 5years rate for fee free 20y mortgage

£80K £456pm 3.681% close to your 3.69% break even
£100k £567pm 3.536%
£110k £621pm 3.483% close to the 3.49% rate
£150k £842pm 3.342%
£200k £1118pm 3.245%

That's similar to what I worked out but for a 25year term. Id be looking to borrow less than £100k

laminki

to be fair, MSE did mention the fee and the LTV in their main article and in the weekly newsletter.

getmore4less

skiking wrote: »

I have to admit I would have expected the amount owed to be reduced by similar amounts (not to the exact penny) irrespective of the interest rate as the whole point is that a repayment mort. is calculated to clear the interest accrued and clear the amount loaned within a set period. Endowment is slightly different but again, the monthly payment is supposed to clear the interest leaving the original loaned balance (give or take a bit) to be cleared by the product taken out to clear the original value.

An easy asumtption to make but It does not work like that have a look at some examples or the regular payments

100k over 25 years(pm rounded)
rate pm left after 5 total payments
2% £424 £83,785.00 25440
3% £474 £85,505.48 28440
4% £528 £87,104.62 31680
5% £585 £88,580.19 35100

using your method ( If I know the monthly amount payable then multiply that by the duration of the fixed period and add on any fees then I know the total amount) a 3% loan can have £3k fees and break even but as you can see the amount owing is different by nearly £1800

now do a like for like adding £3k fees to loan and making the payments the same so the outlay is identical and can be ignored.
2% £103k £474 £83,938.68
3% £100k £474 £85,519.14

Nearly £2581 difference after 5 years even more than the straight calculations using calculated payments because the overpayments make a big difference.

if we use the basic numbers and asume £4800 fees will break even which it might look like

2% £104800k £474 £85,927.82
3% £100000k £474 £85,519.14

so now we are better off with the ,higher rate

IrishEyes

MSE_Guy wrote: »

"A new record low five-year fixed rate mortgage has been launched by NatWest today at 2.95%, amid falling rates ..."

Unfortunately NatWest do not offer this product across all of the UK and NI's NatWest representative bank- Ulster Bank does not offer anywhere near the same 5 year rate. Unfair NatWest + Ulster Bank. Why are people in NI discriminated against. I can have a NatWest savings account (and do) but I can't have a NatWest mortgage???