Re-Mortgage is it worthwhile?

auntym77

Hi,

I took out a 25 year mortgage 5 years ago, with the Halifax. Before that I was on a 2 year 'fixed rate' interest only deal with Birmingham Midshires. I am starting to think about re-mortaging and if it's worth it for me. If I re-mortage can I only get the best deals on 25 year terms or can I re-mortgage to the 20 years i have to run on my current deal? I am 47 and will be paying my current mortgage until I'm 67. The thought of starting at 25 years puts me off and wouldn't make a new deal financially worthwhile.

Thanks
Marnie

Cornucopia

No, you don't have to take out a 25-year term.

Some lenders will probably not offer you that, anyway (based on age at end of term).

EMac_2

Everyone is different and there are many variables to consider so without doing a full Fact Find with an adviser you cant get proper advice. A broker can do the calculations and tell you whether it is worth while.

If you took out a 25 year mortgage 5 years ago then it will have 20 years remaining and unless you change the rate or change the lender then it will continue to run at the Standard Variable Rate (3.99% currently) for the next 20 years. The SVR can change anytime the lender chooses.

You can apply to your current lender or even a new lender for a new rate and term if your want. So your new mortgage could be for 18 years until age 65 or 23 years until age 70 if that what you wanted and was acceptable to the lender.

kingstreet

Ask Halifax what its product transfer options are which are available to you. These are customer retention products you can jump into when your initial offer expires, as an alternative to HVR/SVR.

They are based on loan to value, so it can be worth paying for a drive-by, or internal inspection if you think the value of the property is more than the Halifax desktop valuation. This directly affects the rate you are offered as they are LTV banded, as other products are.

Once you know these options, look at remortgage options elsewhere, but try to stick to the remaining term of your current mortgage. It's pointless going back to twenty-five years. You never actually get round to repaying the mortgage.

Don't forget to factor-in any fees in changing, such as the Halifax £245 account fee to redeem and valuation/admin fees charged by a new lender.