Is it worth an early exit?

Bufger

£120,000 outstanding
£140,000 value
Natwest 5 year fix at 5.99% due to end Dec 2014

I've found a 90% LTV 5 year fixed product with no admin fee at 4.20%.

http://www.thehanley.co.uk/hanley_5_year_fixed_5051.html

The svr it drops on to after the fix is terrible but I'd budget in a mortgage move and with overpayments unless my house decreased in value dramatically then I'd be ok for another product.

One capital overpayment per year though up to 10%. There isn't any issue with exceeding the 10% but I've never heard of overpayments being limited to one per year. The product doesn't say if its annual interest or not so what are the big cons with this?

I'm not currently in the uk so I can't check my paperwork to find out what the early repayment fee was on my current natwest product so if anyone knows the numbers on historic products please give input!

I need someone that's good with the compound interest numbers to let me know if an early exit fee would be worth it in this scenario. If nobody knows the natwest figure then I'll add it to the post next week when im back.

Thanks MSE regulars

Crashandburn

Most of the Nat West 5 year deals had sliding repayment charges ie a lower percentage each year you had the mortgage so worth checking this.

Only downside I see is that valuers are conservative on remortgages and so whilst you may think a £140,000 value, be prepared for someone to trim this down which could cause issues and kick the deal into touch. You have to pay the valuation fee on this deal so might be money wasted

Bufger

Crashandburn wrote: »

Most of the Nat West 5 year deals had sliding repayment charges ie a lower percentage each year you had the mortgage so worth checking this.

Only downside I see is that valuers are conservative on remortgages and so whilst you may think a £140,000 value, be prepared for someone to trim this down which could cause issues and kick the deal into touch. You have to pay the valuation fee on this deal so might be money wasted

Thanks. Our purchase price was £142,000 3.5 years ago and the estimated value since then has been between 138k and 140k. Sales of similar properties on our road are still in that ball park and it would have to be valued down to 133k to be outside of the 90%ltv for this product.

I will check the sliding charges. It was a popular product so I'm hoping some mortgage advisors or other ftb's at the time may remember or have the info to hand.

Thanks for your reply

Crashandburn

Bufger wrote: »

Thanks. Our purchase price was £142,000 3.5 years ago and the estimated value since then has been between 138k and 140k. Sales of similar properties on our road are still in that ball park and it would have to be valued down to 133k to be outside of the 90%ltv for this product.

It seems to be about self preservation at the moment for surveyors. Worried about possible future claims against their PI cover so taking bits off the value where-ever they can.

Still remember mine being valued years ago and being asked 'what's the minimum you need it to be':doh:

Bufger

Thanks for the info. I've just been on an online calculator and if I reduce the term to 20 years at 4.20% it's £70 per month cheaper than my current product. I'd add my normal £100 regular overpayment to that and overpay 170 per month every month which is 4200 off the capital over the 5 years. Is it better to have a longer term, lower monthly payments and overpay what you would be saving up until the overpayment limit? If I could arrange it for 25 year term that would make it £165 cheaper per month + current regular OP would be 9900 over 5 years.