end of 2 yr fixed term - what next?

kingstreet

I shy away from Accord becasue the SVR is so high.

For me, it has to be a very, very good deal to beat Nationwide, for example, whose SVR is 3.99%.

If you can't remortgage when your Accord deal ends, or they have nothing new to offer you, that's 2% more. Bit much if you only save 0.2% for two years leading up to that.

repoman123

I've got no doubts that we won't be able to remortgage and judging from peoples opinions of Accord, it looks like we will be going elsewhere.

I had a quick look on nationwides website and put in rough figures to see how much we would pay monthly etc. All looks good (i.e we would be paying less than we are now, even taking into account that I reduced the length of the mortgage from 30 years to 25) but they charge £1000 fees. Isn't that a bit much? Do we have to pay this up front or can this be included within the monthly outgoings?

The deals I took interest in were fixed term for 2 years.

Many thanks.

Thrugelmir

repoman123 wrote: »

We bought for £125,000 and gave a £18,250 deposit. Been paying £513 on a monthly basis since June 2011 on a 2 year fixed rate deal. I think the rate was about 4.2%. I'm pretty sure the house today is worth at least 130,000 minimum.

To get close to these figures. Appears you have a 30 year term. (let me know if it isn't)

On the basis it is. You'll owe around £103,000, and paid off £3,700 of capital in the 2 years.

If you have an interest only mortgage then I'm totally wrong. :rotfl:

repoman123

Yes we have a 30 year term mortgage. That's crazy how did you work that out?!

Any suggestions on websites where I can compare different mortgages available to me? Would prefer to find my own than use a broker as the only times I will have to go and see them will be Saturday mornings!

Also, I'm gobsmacked at how much we have paid off compared to how much money has gone out my account in the 2 years!! Out of 12k we have paid, the mortgage itself has seen so little of that!

Thrugelmir

repoman123 wrote: »

Yes we have a 30 year term mortgage. That's crazy how did you work that out?!

A useful tool I found a while back. Ignore the $ and replace with £.

http://www.calculator.net/mortgage-amortization-calculator.html?cloanamount=106750&cloanterm=30&cinterestrate=4.2&cpropertytaxes=0&cpmi=0&cothercost=0&cmonthoryear=year&x=-545&y=-385

StuC75

106,750 mtg over 30years with 4.2% shows about 103k remaining after 2 years..

Early years always have the interest taking a higher chunk of the money paid, and as the term was 30 years then less capital is paid off each year(as more years to pay).. e.g. same amount on 25 year term would be about 101.7k..

so 103k owing vs 130k valuation = shows 79% LTV.. Lenders have rate ranges where the better rates offered.. so look around comparison sites - see how balance to valuation can change the rates available.. Go Compare, Compare the market etc..

repoman123

Thanks guys, I'm slowly getting the hang of this. You guys have been really helpful.

I noticed a lot of the threads in this section have 'nationwide' in this title, also someone in this thread mentioned they have low rates currently so perhaps I will use them as a sort of benchmark and compare other products with theirs. Obviously I won't just assume that they're the best out there currently.

Two final questions, different lenders have different fees etc. Is it possible to have these fees added into the mortgage or do I have to pay these fees up front? Only reason I ask is because I'm happy to keep paying a monthly mortgage direct debit but I don't wanna end up paying fees every 2/3 years (basically every time I remortgage, if I end up remortgaging again).

Also, when I'm getting quotes online, one of the questions they ask are what is the value of my house. I'm basically just entering the figure I paid 2 years ago when I purchased the house as I don't think house prices have changed a great deal since then but is this the correct way of going about it? We have decorated the house whole since we moved in so if anything it should be worth more? Thoughts please?

Many thanks.

StuC75

Many may allow fees to be added, subject to the total amount you then owe falling within the Loan To Value ratios.

Worth checking how much you save each month of the fee mortgages to what the Fee Free equivalents will be. E.g. over the 2/3 years fixed period the fee paying products may be just slightly better than the fee free ones. check more into how competitive the SVR (Standard Variable Rate) may be as if that is low then you may not want to keep switching in the longer term..

Some lenders have SVR's lower than the fixed rate that you are currently being offered.. So in time when the fix rate ends it may not always be necessary to move lenders or products..

StuC75

Hard to say re property valuations, decoration can be to personal taste so may not always add to what valuer may say.. if need a valuation to be carried out that could affect what LTV you then have and the type of rate available, e.g. were they to quote 10k lower..

To give it context - Im about to go through a Transfer of Equity, and lenders were willing to go with original valuation - or if I wanted to claim higher value, would need a valuation and run the risk of having to pay more down should that valuation have moved down (buyers market and all that). I'll be keen to keep the original valuation though as waited for LTV to pick up to 85% and Early Repayment Charge to drop down to make a switch of product more viable..