Remortgage and in a fix

coolguycp1

My current 2 year mortgage initial term (@ 2 .9%) is coming to an end in a few months, and I am looking to remortgage soon for the remaining 23 years of the mortgage. I have an LTV of 68% right now on a current outstanding mortgage of £175K, and I can overpay £20,000 to bring LTV down to 60% before the current mortgage deal ends.

Based on the recommendations of L&C for remortgage, I have narrowed down my choices as below:-

1. 2 YEAR FIX

A. ON A 70% LTV – 2.64% (NATIONWIDE) – MONTHLY REPAYMENT - £850
B. ON A 60% LTV – 2.64% (NATIONWIDE) – MONTHLY REPAYMENT - £740

2. 5 YEAR FIX

A. ON A 70% LTV – 2.99% (NATIONWIDE) – MONTHLY REPAYMENT - £895
B. ON A 60% LTV – 2.99% (ABBEY) – MONTHLY REPAYMENT - £785


Is it worth to overpay £20,000 from my savings to bring down the LTV from 70% to 60% in order to achieve a lower monthly repayment, which is effectively a saving of £110/month on both a 2 year or a 5 year fix?

Also, which option should I go for, a 2 year or a longer 5 year fix at this stage?

amnblog

It is not for other forum users to make a decision on whether 2 or 5 year fix is right for you. That depends on your personal circumstances and what you intend to do in the next 5 years.

I would say that 5 year fixes are as competitive as we have ever seen them.

If you do not need your savings for rainy date money the maths will probably tell you that the funds are better used getting your pay rate down to the 60% LTV figures, particularly over 5 years.

Dont know why the Abbey rate is in the mix. Dont like that rate. Not competitive.

coolguycp1

Well, I am also getting inclined to fix for a 5 year period. It will give me peace of mind from any further rate increases in the next 5 years (as long as the rates do not get significantly lower!!).

However, the 5 year fixed rates available direct from lenders (L&G, Chelsea BS, Clydesdale) hover between 2.69% to 2.89% which is not much better than 2.99% from Abbey available through L&C, specially if I add on the upfront fees charged by these lenders (to the tune of £1500 in some cases).

I suppose this is why the Abby deal has been recommended because of the lower overall cost of comparison for the 5 year period compared to others. Also, if I approach any lenders directly, I might not be aware of all their lending criteria, which the brokers do seem to know better in any case and recommend accordingly.

Any ideas on a better 5 year 60% LTV fix remortgage rates than 2.69%?

michaels

Santander also have a 5 year fix at 2.49% with a 1495 fee, free valuation and legals for a remortgage, 60% ltv for current account holders but it is hidden on their website, masquerading as a 2 year fix - having done a search click on compare and you will see the end date is Oct 2018. I am certain this is a 5 year fix as I am currently remortgaging on to it.

Do Halifax and LTSB still have their 2.45% 5yr fixes available too?