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Any downsides to stepped fixed mortgages?
stugib
Posts: 2,602 Forumite
Hi,
Coming to the end of my £136,500 2-year 4.99% interest-only fixed period with C&G at end of June so looking to remortgage soon and go onto repayment.
Despite preferring to move away from C&G they're offering a 5 year stepped fixed rate, initially at 2.99% for 11 months, then 5.99% for the remainder. For our amount I seem to be saving £2200 on the discounted rate, but then paying about £10/m more than the next nearest good deal I'm looking at for 5.89% (49*£10=£490), so it looks pretty attractive, especially with it being fee-free and will avoid paying them a leaving fee if I did go to another lender.
But as with all things that look too good to be true, I'm suspicious I'm missing something
Apart from the fact it's a slightly higher rate for the 4 years, are there any other disadvantages to this you can see?
Coming to the end of my £136,500 2-year 4.99% interest-only fixed period with C&G at end of June so looking to remortgage soon and go onto repayment.
Despite preferring to move away from C&G they're offering a 5 year stepped fixed rate, initially at 2.99% for 11 months, then 5.99% for the remainder. For our amount I seem to be saving £2200 on the discounted rate, but then paying about £10/m more than the next nearest good deal I'm looking at for 5.89% (49*£10=£490), so it looks pretty attractive, especially with it being fee-free and will avoid paying them a leaving fee if I did go to another lender.
But as with all things that look too good to be true, I'm suspicious I'm missing something
Apart from the fact it's a slightly higher rate for the 4 years, are there any other disadvantages to this you can see? 0
Comments
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If you are looking for a 5 year fixed, it looks a reasonable deal.
As interest rates are due to increase soon, you may want to grab it with both hands.
JoeKI am an Independent Financial Adviser.Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Different people have different needs and what is right for one person may be different for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.0 -
Is there a tie in after the 5 years ? this sounds a lot like the American ARMS morgages (google them for more info)If it doesnt pay rent sell it.
Mortgage - £2,000
Updated - November 20120 -
All I would say is make sure you can afford the repayments when they increase to the full rateI am a Mortgage Adviser
You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
It looks like a very reasonable deal to me. There are no extended repayment charges or other hidden terms.
They also have a product with a lower rate for the first 11 months (1.99%) but with a fee (I think £895) which I think works out cheaper, you might want to check this.I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
at this as well as out £108k 4.99% fixed ends at the end of June......
I also had exactly the same concerns, it appears to be a wonderful deal, They are offering 5.89% fee free or 5.99% for four years after an initial 2.99%for 11 months also fee free.
If I over pay by 10% on the savings then I will owe less so repyments on 5.99% will become less as I will owe less if you get my drift.........
There are also no tie in's after the 5 years are up.
I will check my figures on the 1.99% but I think the £899 fee will make it more expensive.
Any other thoughts.?nothing.0
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