Mortgage rates question 30 January 2013 at 9:12PM edited 30 November -1 at 1:00AM in Mortgages & Endowments 4 replies 429 views

ccbrowning

Sorry for the silly question.

But, can someone explain the following on a 25 year mortgage? It has the 'Initial Rate', the SMR, and the 'overall cost'. There are 3 different % for these. The 1st two make sense on their own, but what is overall cost? Just trying to figure out 25 year fees, etc. or what numbers to put into an amortization spreadsheet.

Thanks so much.,

ACG

The overall cost is a waste of time.

It takes into account the initial rate, the SMR rate and fees - but its based on a few presumptions so its pointless really.

ccbrowning

Thanks - so it's just some weird approximation of the initial rate and SMR (for the 20 after that) and fees?

ACG

The idea is that anyone can compare any mortgage using the overall rate - but the reality is that people swap and change every now and again and the SVR rates go up and down, so its pointless.

ccbrowning

Ahh, OK. I'll just go off the initial 5 year fixed rate then, especially since I will be overpaying to the maximum and should be able to remortgage at a better LTV in the future.