Two rates which one will save more money over a two year fix term

HARSA

Borrowing £105k over 23 years two year fix term

1 - First direct 3.19% product fee of £499, £149 valuation fee and £400-£600 solicitor fee
2 - Halifax 3.84% no fee, no valuation or solicitor fees

I worked out that over the two years one can be sav by going for the 1stdirect deal.

Anyone clever enough to do the calculations for me - showing exactly where the savings will be made?

Thanks in advance

Thrugelmir

Factoring in costs. Differential could be marginal.

HARSA

Thrugelmir wrote: »

Factoring in costs. Differential could be marginal.

My friend has been accpeted by both - he banks with Halifax so they haven't asked for any evidence so fairly very straightforward.

On the other hand he has to put together a lot of things like 3 months bank statement, p60, wage slip & the lot. He is feeling bit lazy to get all those things for them.

But I convinced him that 1stdirect is way cheaper so worth the hassle.

Am I am wrong? and by much?

Thrugelmir

Consider the follow on SVR rate as well.

Remortgaging every 2 years isn't an economic option as the mortgage balance reduces. At some point you'll be stuck with one lender.

HARSA

Thrugelmir wrote: »

Consider the follow on SVR rate as well.

Remortgaging every 2 years isn't an economic option as the mortgage balance reduces. At some point you'll be stuck with one lender.

Very true indeed - thanks i will pass it on. He is most likely to go the halifax deal.

getmore4less

HARSA wrote: »

Borrowing £105k over 23 years two year fix term

1 - First direct 3.19% product fee of £499, £149 valuation fee and £400-£600 solicitor fee
2 - Halifax 3.84% no fee, no valuation or solicitor fees

I worked out that over the two years one can be sav by going for the 1stdirect deal.

Anyone clever enough to do the calculations for me - showing exactly where the savings will be made?

Thanks in advance

Add the fees set the payment the same see what is left after 2 years

1. £106150 @ 3.19% 23 years is £544pm (£500 sols fees)
2. £105000 @ 3.84% 23 years is £574pm

make both payments £574 after 2 years
1.£98,928 (if the sols fee are £600, £99,034.61 )
2.£99,073



Check the follow on rates they are important

ScotlandM

FD could be saving 30/month but you have to pay the fees up front
Why are you/they only looking at 2 year fixes?
The costs of remortgaging will only start to get worse as they don't reduce for smaller remortgage values. You need to be thinking of staying somewhere that has reasonable fee free products or a good followon rate.

getmore4less

ScotlandM wrote: »

FD could be saving 30/month but you have to pay the fees up front

If you pay the fees up front on one, you have to take the equivilent off the other option to do the comparison.

HARSA

He has decided to go with halifax as he doesn't have to provide any documents.

ScotlandM

FD does indeed save 30/month
but at the end you'l owe an extra 700, which roughly over 24 payments is 30.

Glad he is staying with Halifax and less paperwork