Need suggestions Please!!!

RickyJ

I'm re-mortgaging for the first time. At the moment I'm currently on LTV 73% and I've done allot of searching. Now I've narrowed it down 3 mortgage choices. I'm struggling to make a choice here. Can you please provide your suggestions? Thanks

Santander (before switching Santander I would need to make an overpayment to reduce my LTV to 70% and overpayment is not an issue).
1. Two year fixed, LTV 70%, 2.69%, No Fee (free valuation and legal) – Cost over two years £13643.
2. Two year fixed, LTV 70%, 2.99%, Free £995 (free valuation and legal)- Cost over two years - £13535
3% Early repayment charge
total of 10% of the outstanding loan per year are allowed without charge.
Redemption fee 225
If I decide to let my property within the two years, they will keep me on the same rate there is one off charge of £295, provided that I’ve completed 6 months

Post office
3. Five year fixed, 2.99%, LTV 75%, Fee 1945 (valuation £270 and legal £700) total in fee £2660. Average cost over two years £13936
5% early repayment charge
Total of 10% of the outstanding loan per year are allowed without charge.
Redemption fee 195
If I decide to let my property within the five years, they will keep on the same rate and there is one off charge of £299, and annual charge of £199.

Please provide your suggestions on which choice would be better? Thanks

GMS

You can't compare a 2 year fixed to a 5 year fixed.

Need like for like products.

RickyJ

@GMS I understand your point. If I'm comparing similar 2 year products. Then Santander's 2.99% without fee would be better. However I'm struggling to make a choice if I should go for 2 year or 5 year fix. Any advise/suggestion?

GMS

Its a personal choice between 2 and 5 year fixed. Do you prefer longer term security or shorter term lower payments.

Look at what would happen after 2 years. If Santander I assume you revert to SVR which is 4.74% for Santander. Assuming you compare against the 5 year fix it means 3 years at 4.74% (currently which can change regardless of base rate) as opposed to having 3 further years on 2.99% if Post Office.

If you can get your LTV to 70% then the Post Office deal can be bettered. Not on rate but on fees and valuation costs making it better overall.

A 5 year fix may look very cheap after a few years. Also consider what you would do after 2 years on the Santander mortgage. Would you lok to go elsewhere and incur the costs all over again?

Rates are historically low so the long term fixed can be very beneficial if thats what people want.

Consent to Let may or may not be granted when you want it regardless of what is being said today.

Look at the figures and see what you think.

bugbyte_2

Factors I would consider (not necessarily you I can't give advice):

With a 2 yr, assuming you move mortgages again, you will have to pay another lot of fees, then another lot after 4 yrs. Any calculations you do should include this in your long term projections - Easy way - Fees /5 for 5 years, and fees /2 for 2 years added to the amount payable per year.

You have no idea what BOE rate will be after 2 yrs, but you do know it can only go down another 0.5%. However, it could just as well go up. I can still remember 10%! You will have to decide on the likelihood of getting such a good deal or a better deal in 2 years time.

Finally, what is the cost to you for the effort of moving your mortgage again in 2 yrs time?

Good luck!

Thrugelmir

No guarantee that an interest levy may not be added if the lender agrees to CTL.