Easy Decision???

sls_3

Hi All -

I am buying my first home soon and have decided on a 3 yr fixed rate. After doing a number of searches and comparisons using this site and a couple of others I have found one from the Portman Building Society (4.79%, 6.5% APR)that for the period has the cheapest rate/monthly payments and no tie ins after the fixed rate period. The initals fees don't appear to be too scary either.

To me this must be the one to go for, but I am sure I am missing something as all I have done is looked for the one with the cheapest monthly payments and true cost. Can anyone tell me if I am missing something? What else should I be asking or looking for from other Mortgages sellers to compare back to Portman's offer?


Ta!

lisyloo

1) You should certainly compare the initial fees.
2) Also whether it's annual or daily interest.
3) Whether you can make overpayments on not i.e. flexibility.
4) How much the penalty is.
5) How much the fees are when you come to leave.
6) Whether they give you access to their other deals when you come to the end.

Some aspects are obviously more important than others.

herbiesjp

There are some better rates and some worse rates - it just depends on what you want from the mortgage i.e the points lisyloo states.

What fees are compared to each other etc.

You can do your own homework or talk to a mortgage adviser/broker who should be able to do the comparisons for you.

sls_3

Thanks for the additional questions they are rasing some more questions for me now!

I believe the Portman calculates interest annually. Seeing as I am proposing on getting an interest only mortgage for the first 3 years what effect will this have for me (if any). As it is a fixed rate I would assume none.

Thanks,
SLS :j

lisyloo

If you have an interest only mortgage then annual and daily will be identical.

However you have to be careful with overpayment (if you are allowed to make them and have some).
For example if the lender calculates the interest for the whole year on December 31st, then you make a payment on January 1st, you will effectively lose a whole years interest.

One way round this is simple to put your overpayment in a cash ISA until the right date. You can get more than 4.79% in a cash ISA anyway so you won't be losing out.

musey

Hi

I have this mortgage with Portman, I did look at changing but was advised by the mortgage brokers that although it is annual interest it would be more trouble than the gain (approx £3-4 cheaper pm if I changed) would be worth. They advised saving any additional payments I would make and paying them 1 week before the date of interest calculation.

I currently have £35k stoozed earning interest in my cahoot account, the addtional payments I would have paid monthly are paid in there also and I have a huge great big diary note to get a transfer organised before the calculation date.

I have been with Portman (Staffordshire that was) for several years and have always found their customer service to be good.

Hope that helps but if you want any more info let me know.

Interestingly are you going for the 4.79% fixed or variable rate? I've gambled with the variable *fingers crossed*

Cheers

Froggitt

Its a reasonable rate, but I too am going to gamble with a discounted variable rate.....the 4.75% tracker from First Active, available for 3 or 5 years.