Fixed rate Mortgage just ending, where to now?

Hagrid

My Fixed Rate Mortgage is just finishing(June) and the original Brokers have contacted me to advise I should leave Bristol and West whom it is with as their Rate will incerase, and get a new Mortgage lender.
They advise the Abbey as it has a good fixed rate, free legals and valuation, although the set up cost is still £999.00, so I dont see it as free!
any better deals out there, I find it all pretty confusing to be honest!
my home is worth approx £165000 and my existing mortgage is £57000.
thanks for any help, oh yes I am 47, so a 18 year deal will be what I am looking for!
thanks.

Matt_Ratcliffe

There are plenty of great remortgage deals out there without the need to pay any set up costs.
That said sometimes it is worth paying a set up fee to obtain a lower interest rate.
Best thing to do is try more than one advisor.

herbiesjp

What rates have Bristol & West offered? What is the fee going to be to leave them?

YOu are looking at over £1000 in set up fees, so make sure you are going to recoup those fees in the lower (hopefully) monthly mortgage payments payment you will make to Abbey

HTH

MortgageMamma

Hagrid

Give your adviser a call and ask them to write down the maths for you as to why the Abbey deal is the best and also ask to see a copy of the sourcing results (that is the list of lenders and deals that came off the brokers mortgage analysis system) which are specific to you. Most good brokers will do this as a matter of course for clients, I generally do, and if they have nothing to hide they will not object.

Rick62

Also when you have the details of the Abbey mortgage ring up Bristol & West and see if they have any better products they can offer you. I think they just reduced most of their rates this week.

Hagrid

Thanks for your advice, I wish it wasnt so confusing all this financial stuff!
I shall contact Bristol and West abd tell them I will have to leave them if they cant come up with the goods, and shall ask a few more Brokers, thanks again,
hagrid

Leon_W

Rank bad advice from whoever your using Hagrid.

Just talking Abbey, the deal you've been offered is the 5.14% two year ? Am I right ?

For a small mortgage like yours, much cheaper would be the Abbey 5.64% completely fees free.

This is mortgage broker basics.

Mr_helpful

And if B & W offer you a new fees free rate below 5.64% even better.

Leon_W

Here are the figures for you. (costed over 2 years)
Abbey 5.14% , Arrangement fee £999, Start balance £57995, End balance £53869. Monthly Repayment £412.15.

Abbey 5.64% , No fees, Start balance £57000, End balance £53127. Monthly repayment £420.70

So, costing this out over the 2 year fixed period you can see that 2nd deals monthly repayment is about £8 higher BUT, because you are not paying interest on that stupid (in your case) arrangement fee the payback is at the end of the two years when the outstanding balance is considerably lower. By taking the higher (fees free) rate I reckon you would save over £500 in two years.

Therefore I concur with Mr helpful. If B & W offer anything under 5.64 then it's worth considering. If you do move, don't forget to add in B & Ws mortgage discharge fee to the calculations.

Regards

MortgageMamma

Good lad Leon, didnt spot that myself!

MarkyMarkD

There's no way it is ever worth anyone with a tiny £57k mortgage paying a £999 fee. The original broker is clearly incompetent.

The fact that he doesn't seem to have considered what B&W would offer as a retention deal (which should be the first place to start, especially for someone with a relatively small mortgage on which MEAF and other fees become relatively more significant) doesn't bode well for his general professionalism.

But then, maybe he fully researched the market (including the B&W retention offers) and came up with his advice. Yeah, right.