Remortgage for a few months?

clairebeth

Hello,

This might sound like a silly question, but it only just occurred to me that this might be possible...My hubby and I have just come to the end of a five year mortgage deal with Teachers Building Society on a fixed rate of 6.04%. We have recently put the property on the market, so when they asked us if we would like a new product, we said no, we would just stick to their standard variable rate of 4.99% so that we don't get 'locked' into anything while we are selling.

What I am wondering now is, would it be possible for us to move to a cheaper rate, perhaps a 'tracker' from another provider, without being locked into a fixed term? Is it possible to remortgage for a matter of months? Some of the tracker rates are half the rate that we have been offered, and could mean a saving of £200 a month for us. We would have 75%LTV

Has anyone had experience of doing this? Or does it sound not worthwhile?

What I don't want to happen is take a year to sell and then have been sitting on the standard rate that whole time.

Any advice appreciated!

Claire

Thrugelmir

You need to factor in the costs of remortgaging to another lender for a short period of time.

Have you considered staying with the Teachers BS? As any product should be portable to a new property. Any additional borrowing would be at rates applicable at the time. If you chose a 2 year deal then you'd be in a position to remortgage elsewhere within a a relatively short time frame.

clairebeth

Ah, yes, that is certainly possible, I'm sure! Thank you for your advice, I will look into it!

clairebeth

I just phoned them, she offered 2.19% with no fees! We can transport it to a new property and keep that rate on our existing borrowing, then any extra borrowing would be charged at a seperate rate. Thank you! This will actually halve our mortgage payments! (Although we will just choose to overpay to get ahead).

I can't believe I never though of this!

Thank you!

kingstreet

You must remember, to port to a new mortgage, you have to satisfy the lender's affordability and other criteria at the time.

Next month, all lenders will have to amend their affordability models following the MMR and you may find you can borrow less in May than you could in March.

The kind of thing you've just discussed with them, a product transfer, will require a formal advice process so you are properly advised and not just told there's an option if you want it...

We treat such things like that now, but lenders don't, so if you pick the wrong thing, it's your fault, not theirs!

Yorkie1

I'm not sure I'd want to overpay in your circumstances, given:
- the low interest rate and
- the more you reduce the balance by overpaying, the more you'll be borrowing on the additional rate (likely to be higher) when you move.

Also double check with them whether you have to have been on the new product for a certain length of time before you can port it.