Remortgage - this is a good deal?

Thomo2710

Hi,

My mortgage is due to expire with Santander in April - been with for 3 years and on 5.99% fix at £825 per month

I borrowed 138 and i have 132 outstanding.

I think a fair valuation of my property is 170,000 (being conservative)

I have quickly put some details into £ comparison site and its found what i think a good deal with the Co-Op/Britannia

On a loan of 132,000 - they offer 3.89% deal thats fee free (well there is a £70 land registry fee) fixed for 5 years at £655 a month based on a 27 year term

It doesnt appear to be portable and has a tiered early repayment charge but i dont see us moving in the near too distant future anyway so i dont think this will be a problem

This sounds a good deal.

But this is my first time remortgaging so im not really 100% sure.

What do u guys think?

Thanks

Crashandburn

Its a good deal.

Only thing to watch out for is surveyors knocking your property valuation down. They tend to be conservative on remortgages and look after their own interests rather than a true value.

Ideally if the deal has no upfront costs, then you have nothing to lose.

Even 5 year deals with fees are only saving you circa £500 over the 5 years.

Good luck

Thomo2710

Crashandburn wrote: »

Its a good deal.

Only thing to watch out for is surveyors knocking your property valuation down. They tend to be conservative on remortgages and look after their own interests rather than a true value.

Ideally if the deal has no upfront costs, then you have nothing to lose.

Even 5 year deals with fees are only saving you circa £500 over the 5 years.

Good luck

Well i brought the house for 153 and it was a tip - its been renovated from top to bottom and fair market value is around the £180 mark for the house and area, so im going off £170 taking this already into consideration.

kingstreet

At that mortgage amount, you might be better with a lower rate, higher fee combination. As long as you have a decent time to save enough to cover the costs, five years should be enough, the rate is more important to you.

On a £132k mortgage, your offer is going to cost £25,674 in interest.

Using a 3.19% fix for 5 years, the interest cost would be £21,054 for a deal with free valuation and free legals. The arrangement and booking fees total £998.

A bit rough, I admit, but you need to research what you are doing a bit more, IMHO.

Crashandburn

In that case, should you submit the application on the market value of £180k and be in with a chance of the 3.39% at 75% deal?

Worst case is they cascade you up to the 3.89%.

Thomo2710

kingstreet wrote: »

At that mortgage amount, you might be better with a lower rate, higher fee combination. As long as you have a decent time to save enough to cover the costs, five years should be enough, the rate is more important to you.

On a £132k mortgage, your offer is going to cost £25,674 in interest.

Using a 3.19% fix for 5 years, the interest cost would be £21,054 for a deal with free valuation and free legals. The arrangement and booking fees total £998.

A bit rough, I admit, but you need to research what you are doing a bit more, IMHO.

Could you please tell me the maths you used to work these totals out?

Yes the interest rate is the important thing to me to bring my monthly repayments down!

Is is good information you have provided me, thankyou!

getmore4less

kingstreet wrote: »

At that mortgage amount, you might be better with a lower rate, higher fee combination. As long as you have a decent time to save enough to cover the costs,

If lenders let you add the fees to the loan without crossing a LTV boundry there is no need to save.

It makes no difference to the cost/saving comparison calculations.

Crashandburn

getmore4less wrote: »

If lenders let you add the fees to the loan without crossing a LTV boundry there is no need to save.

It makes no difference to the cost/saving comparison calculations.

Yes it does.

You are then stacking say £1,000 in fees onto a mortgage over 27 years which probably trebles the amount of the fee. Kingstreet mentions the West Brom deal at 3.19% but this has £899 arrangement fee hence the advice to save up for this fee rather than see it treble by adding it to the loan