Fix for 5 years or over pay?

thenewbee

Found a really good mortgage deal from First Direct - their limited edition rates are really low! And they also offer 5 year fixed rate. My question is this - would it be more beneficial to fix at just below 5% for 5 years or get a 2 year fix at s lower rate which would allow us to over pay about 2-300 per month?

FTB borrowing around 175, 000 over 30 years with 10% deposit


Any advice welcomed!

Let_Us_See

What is your LTV? It must be quite high as just below 5% for a 5 year fixed appears a little high.

thenewbee

I said in original post - 90% ltv

Calfuray

Will the fix not allow you to make overpayments?

I recently fixed for 4 years and I can still OP up to 10% of the balance each year. (I'm not with FD though)

thenewbee

Calfuray wrote: »

Will the fix not allow you to make overpayments?

I recently fixed for 4 years and I can still OP up to 10% of the balance each year. (I'm not with FD though)

It's more that the monthly repayments are higher on a 5 year fix and we wouldn't be able to overpay by as much.

dimbo61

To get a FD mortgage you need to earn over £50K single or £75K joint so good income.
Check the T&C,s of both offers as I have read they allow UNLIMITED overpayments.
The rate they are offering is 4.59% which works out cheaper than 4.39% with £1,499 fee ( Only by £40! )
So repayment each month is £896.08 per month?
After 5 years you would still owe £159,742 give or take a few pounds.
So after paying nearly £900 a month £10,800 a year for 5 years =£54,000 you will have paid off just over £15K

thenewbee

dimbo61 wrote: »

To get a FD mortgage you need to earn over £50K single or £75K joint so good income.
Check the T&C,s of both offers as I have read they allow UNLIMITED overpayments.
The rate they are offering is 4.59% which works out cheaper than 4.39% with £1,499 fee ( Only by £40! )
So repayment each month is £896.08 per month?
After 5 years you would still owe £159,742 give or take a few pounds.
So after paying nearly £900 a month £10,800 a year for 5 years =£54,000 you will have paid off just over £15K

Could you show where the income requirements are set out please?

Imma_Number

50K & 75K salary requirements box pops up on the FirstDirect "Find and compare our mortgages" page but only if you select Offset so I don't think it's a requirement for FD's repayment mortgages.

bluesbell

Imma is correct, I've received my offer documents from FD for repayment mortgage and earn less than 50k

thenewbee

bluesbell wrote: »

Imma is correct, I've received my offer documents from FD for repayment mortgage and earn less than 50k

Thank you - I'm after a repayment.

dimbo61

Sorry I love offset mortgages so always look at offset deals.
I am wrong to state that you need an income of £50K to get a repayment mortgage.
The rest of the figures are RIGHT
So after paying a mortgage for 5 years you would still owe £160K