Advice please - mortgage rate is now 7.3%, is this very high?

blue_monkey_2

I have posed this question before but without confirmations of what the new rate was going to be. Mum got a letter this morning to say that her new mortgage rate is going to be 7.3% from next month.

She has around 24k left and 2 years ago done one of the 2 year special deals which has come to an end and from the figures means that she will pay an extra £35 a month because of this.

Am I right in thinking that you have to pay around £800 to start a new deal even with the same bank? Will they incorporate this in the mortgage? What about a new bank as she does not have £800 to be able to start a new agreement. What is the best thing to do - if she pays £800 and this ends in 2 years time then 24 x 35 would be just over £800 so she would be better off sticking to the rate she has just been given wouldn't she? It would just be a vicious circle isn't it, each 2 years taking on the same money she has just paid off.

What is involved in getting a new mortgage - is there one you can get online or is it through a bank etc in person... I apologise but I have never done the morgage thing before apart from when I went with mum last time. Mum does not have anything in the way of payslips from her employer for whom she has worked for 10 years, she has never asked for them as she earns under the rate for tax and NI so the employer has never given then. She has a wage slip from her other employer but only gets around £120 a month from this job. I have to do this with her but am not going to get time to get into town with her as my kids are about to start longer hours at school and I don't have childcare - mum gets just 2 hours between jobs to get anything sorted and that does not work with the time I have between getting the kids sorted.

I have also seen loans being offered at 5.5%. is this a general thing? This is surely cheaper than the mortgage rate she has now. Please can you help with some advice as not sure where to start, this rate just seemed very high.

Assuming there is 15 years left, am I right in assuming that if this rate stays the same she can expect to pay:
15 x 12 x £181 = £32,580

Is this corrrect? If looking for a loan I would need something of the same rate along these lines as surely the mortgage rate is going to rise again and a loan would give stability?

Any advice from those in the know would be appreciated as I would not like to see mum losing money for too long each month if possible.

Thanks.

wardlaw

From what I can gather, your mother has been put on the lenders Standard Variable Rate as the average current SVR is 7.30%

You mother could re-mortgage to another lender with a betterrate of interest
But try to get a free valuation carried out, along with Free legals which are readily availble

There will, however be some kind of application fee, which is dependant on the lender, but this could be added to the new re-mortgage if required But remember this will attract interest during the period of the loan

bradrock

she lucky, i am on spml 9.3% 39000 365 a month.

bigdic

Step 1 would be to give her current mortgage company a call and ensure there would be no redemption charges if she pays of the mortgage and moves to another lender. Also ask them if they are offering any new deals which she could take up, this is by far the easiest route to take usually.

Step2 If they don't give her something she's happy with then she can start to shop around, I'd reccomend the magazine "What Mortgage" it's got descriptions of all the mortgages available and the current good deals.

A lot of companies will pay all the fees for you if you move to them, or as Wardlaw said you can add any fees on to a mortgage but it will accrue interest.

Generally you get the best rates if the amount you are borrowing is low in comparison to the value of your property.

plane_boy2000

First thing is to call your exisiting lender and see what they will offer you. I am pretty sure that they will offer you something better than 7.3% so you may be able to reduce your mums payments with little more than a phonecall.

blue_monkey_2

Many thanks for your email. I ill start with this and get her to call them. While I do not know much so knows nothing and gets really tongue ties and I have to deal with it. This is why I thought I would ask.

I will get her to call them and see what they suggest, thank you (or maybe I an try as I had permission to talk to them last time)

blue_monkey_2

I forgot to add, there has been no valuation but I am estimating the house is worth around £250k, we have no central heating and the other houses around here go for around £325k so I have dumbed it down a little. There is a lot of equity in the house so no reason why someone would not lend her the money to be honest.