Help!!

tony863

Hi All,

I'm in the process of buying my first house and I have until Monday to decide which mortgage to take.

I am borrowing over and above the amount the property is worth and therefore don't get such a great rate.

I have narrowed it down to three choices:

1. 2yr fixed @ 5.85% = £1025 per month

2. 2yr fixed @ 6.09% = £1044 per month with £1000 cashback

3. 3yr fixed @ 6.19% = £1056 per month with £1000 cashback


I don't know which is going to work out the best and I don't know how the interest rates are going to go in the next couple of years.

Is it better to stay fixed for longer, or shall I go for two years? and even if i go for two years, shall I go for the thousand pounds cashback, or not???


HELP!!! Please, any advice will be most welcome

kingkano

What are the associated fees with each of these mortgages? is there any extended tie in after the rates finish? do you need the cashback for any particular purpose (furnishings, solicitors etc) - or are you all set on those fronts?

maninthestreet

Consider the total amount you will pay over the fixed rate period:

1. £1025 x 24 = £24,600
2. (£1044 x 24) - £1000 = £24056

So 2. looks better than 1.

For 3., the fixed rate is over 3 years, but for the first 2 years you pay:

(£1056 x 24) - £1000 = £24344

So 2. looks the better deal, assuming you can re-mortgage at the end of the
2 year fixed rate period, and get a deal better than 6.19% p.a.

tony863

Associated fees are the same for each so that doesn't matter. I don't think any other terms or fees apply

I did however get the payment per month wrong on option 1.

it should say £1015 per month not £1025.

Does that make any difference maninthestreet?

tony863

I know what you mean when you say that as long as I can get a better rate at the end of the two year period, but is there any indications from previous trends of what will happen with the interest rates?

At the moment, am I right in thinking that the interest rates are particularly high?

If that is the case, then will they not go down in the next couple of years?

KTF

Sounds like you need my spreadsheet

tony863

Thank you, I will PM you now.

Any other advice is still very welcome.

What option would anyone else take?

tony863

all received, much appreciated, thanks

wardlaw

The best deal for you is option 1 fixed for 2 years with cashback there are no redemption penalty tie ins after the 2 years 3 years is to long as interest rates change up and down more often these days

Independent Mortgage Beoker

wardlaw

sorry option 2

HypnoTease

wardlaw wrote: »

The best deal for you is option 1 fixed for 2 years with cashback there are no redemption penalty tie ins after the 2 years 3 years is to long as interest rates change up and down more often these days

Independent Mortgage Beoker

How can you say that? you do not know this man and you have not accessed his circumstances in full. you could be giving him the wrong information.