Re-mortgaging for the first time!

getmore4less

You can't do it like that it gives the wrong answer.

You need to add the fees make the payments the same and see what is left after the relevent periods. 3 years for the one being looked at.

getmore4less

In march you will owe about £128k

Paying the same £874 and 2 deals one at 4% the other at 3.65% over 3 years

the fees on the 3.65% must be less than £1200(ish)

Consumerist

getmore4less wrote: »

You can't do it like that it gives the wrong answer. You need to add the fees make the payments the same and see what is left after the relevent periods. 3 years for the one being looked at.

You are getting confused.

The OP doesn't want to know the effective rate on a mortgage which includes up-front fees. He wants to know how much additional charges can be added to the mortgage to keep the effective rate below the 4% SVR. A different thing altogether.

getmore4less

Consumerist wrote: »

You are getting confused.

The OP doesn't want to know the effective rate on a mortgage which includes up-front fees. He wants to know how much additional charges can be added to the mortgage to keep the effective rate below the 4% SVR. A different thing altogether.

That is what you decided it was what he needs to know.


the question asked was

How do i calculate if with fees i'll be better off than staying on my SVR

if the fees are more thn £1200 he WILL BE WORSE OFF after 3 years which is the term of the 3.65%.

To go beyond that you need the followon rate of the 3.65 which you don't have.

Consumerist

Point taken. I hadn't considered the position after a new 3-yr fixed deal.

getmore4less

woops got the rate wrong

getmore4less wrote: »

[STRIKE]In march you will owe about £128k[/STRIKE]
In march you will owe about £132600k

Paying the same £874 and 2 deals one at 4% the other at 3.65% over 3 years

The fees on the 3.65% must be less than £1240(ish)

getmore4less

One trick when comparing mortgages is that in most cases you can ignore the term and just use the other 3 variables,

amount borrowed.
interest rate.
monthly payment.

Then look at the amount owing at the end of a period.

initialy you can use term get the estimate of the monthly payment.

purcel

Thanks everyone for your help, i will have a play on the mortgage calculator and see. It's still new to us and don't want to take the wrong decision

Consumerist

purcel wrote: »

Thanks everyone for your help, i will have a play on the mortgage calculator and see. It's still new to us and don't want to take the wrong decision

Just to clarify - I agree with getmore4less that £1600 is about the maximum you want to pay in charges to keep under the 4% overall. Unfortunately you really need something like a spreadsheet to work this out accurately.

That said, a poster, JimmyTheWig came up with a reasonable rough-and-ready method on <this thread> (See post #5). According to this method, fees and charges of, say, £1,600 represents about 1.2% added to your £132,170 balance in March. That extra 1.2% will be spread over the 3 years of the new deal (i.e. ~0.4% extra per year).. Adding the 0.4% to the 3.65% deal to make the overall rate about 4.05%.

The accurate answer is closer to 4.0% but the rough calculation should give you a pretty good idea. Hope this helps.

purcel

Thanks for that. Also something I didn't quite took into consideration is the SVR after the fixed rate which at the moment for most of lenders is around 4.75-4.99.