Remortgage advice needed please!

2kool

Hi,

Our Halifax 2 year fixed rate mortgage is due to expire on the 30th of September. Presently we pay £358 per month on a 25 year mortgage of £100000 (currently the mortgage is interest only).

After reading Martin's remortgage guide I decided to contact L&C broker. They have just got back to me today and recommended I stick with the Halifax on another 2 year fixed rate mortgage. The monthly payments have jumped to £513.61 per month which seems a lot even with the interest rate rises for a mortgage of approx £100000 over 23 years. Does this seem a good deal? I stated I would like a fixed rate mortage again to L&C?

Does this sound right? Obviously this is a huge jump in my monthly mortgage payment (approx £155 a month) - and I wanted some advice if poss?

Any advice would be greatly appreciated.

2kool

KTF

What interest rate is your current deal and what interest rate is the new one. Is it a repayment or interest only mortgage.

2kool

My current interest rate is 4.29% (it is a 2 year fixed which is due to run out on 30 September.

The new rate I have been quoted is 6.14% (this is staying with the Halifax).

Any help would be really appreciated.

2kool

xshark

Try ING Direct. Their variable rate is much, much cheaper than what I am currently paying with Northern Rock and probably less than the fixed rate figure that you quote. Plus there are no arrangement, legal, exit or valuation fees. The only drawback is that you have to do all the legwork yourself but up to now it been very simple.

gstaader2000

On an interest only mortgage, the payment calculations are very simple. Multiply the interest rate times your mortgage amount, and divide by 12 for your monthly payments. £100,000 X 6.14% = £6140/12 = £511.66. Halifax currently has some better re-mortgage rates for existing customers than 6.14%, but it depends on your other circumstances as to what may be the best deal. Keep in mind that by staying with the same lender, even though the interest rate may not be the best in the market, you are usually saving money on fees, particularly not having to pay valuation and legal fees.
I am a Mortgage Adviser.

MarkyMarkD

I would personally be very surprised that 6.14% fixed on a £100k mortgage was the best deal, even given the saving in fees by staying with the same lender.

But I'm also heartened to see that an intermediary is actually recommending someone to stay with the same lender rather than unnecessarily churning them as many seem to do.

You haven't said if the 6.14% is also conditional on paying some switcher/product fees. If it is, I'm even more confident that it's a poor rate and can be beaten; if it isn't, then it's probably worth paying a fee and getting a cheaper rate given the size of your mortgage.

Please ask L&C what the best alternative to Halifax is, and why they suggest NOT remortgaging. I'd love to hear their answer in these circumstances.