Mortgage advice

Gopher123

Hi,

I am in a bit of a quandary as to the best course of action to take with my mortgage.

The fixed period on the second part of my mortgage is coming to an end and will go up to 4.24% shortly.

There are a few deals available to me which I will outline below, but with interest rates set to rise in the next 12-15 months (I think this is a safe assumption), I am trying to work out what to do.

I have been offered Fixed Rates as below...

2 Year 2.79%
3 Year 3.19%
5 Year 3.59%

These are with no product fee, the mortgage stands at approximately £42,850.

I am feeling pulled towards the 5 year deal As i feel that deals when I am close to renewing in either 2/3 years time will be higher at at least 4-5%, I know that in the end this is all guesswork but hoping someone could give me a little advice.

Thank you

dimbo61

Without someone sitting down with you and looking at all your finances we can only guess what is right for you!
Do you plan on living in the property for the next five years? or the next 20 years?
Age, Income, Savings, kids, pension, ETC WE know nothing.
The BOE base rate has been 0.5% since March 2009 ! We do know that.
When and by how much it goes up in the next 2/3/5 years is the big question.
With a mortgage of £42,850 how much difference does it make between 2.79% and 3.59% ( this depends on the term left)
If you can afford to I would take the 5 year deal and reduce the mortgage term to five years!
Now this would mean your mortgage payment would be £781.24 a month and we have know idea if you can afford this ????
We have been overpaying our mortgage every month for the last 9/10 years because I want rid of the DEBT and save a lot of INTEREST

dimbo61

Sorry reread your post !
This is only part of the mortgage!
Still think the 5 year deal is good value ( Having paid 4.74% myself for 5 years!)
Keep the term the same and overpay IF you can afford too
Good Luck

Gopher123

Thanks for the replies, yes sadly it is only the second mortgage part It will always be a bit of a gamble, but I guess you are right I can't really go wrong with a 5 year fix at this moment and try and make extra payments when I can afford it, which is my intention.

amnblog

Useless £28 a month is going to kill you, go with the 5 year fixed rate that you 'feel' better about.

Gopher123

Well phoned up today (Santander). I've got two mortgages with alliance and Leicester, the second part was when I moved.
Having originally been told that I can change one part of the mortgage (I've always been told that they are treated as separate mortgages) I was told today that any change effects both parts.

The first part of the mortgage is 1.25% it's the biggest chunk too, so I'm in no hurry to change.

Does anyone know if they are treated separately? Very confused.

amnblog

If Santander say one affects the other - who are we to disagree?

JimmyTheWig

Our mortgage is with Santander and in multiple parts.
We are able to change the deal on some parts without changing the deal on other parts.

I know that they treat A&L mortgages differently to Santander mortgages, so can't guarantee that it would be the same for you. But I'd definitely phone and speak to someone different and see if they say the same thing.

As to the length of the deal that you go for (if you are allowed to do it), is it worth trying to get both parts to finish at the same time? E.g. if you are tied in on the other part of the mortgage for 3 years then I'd be tempted to go for a 3 year fix.

Gopher123

I didn't get a clear answer spoke to 4 different agents, I think it's the alliance and Leicester part that confuses them.

But all sorted now.

JimmyTheWig

Gopher123 wrote: »

I didn't get a clear answer spoke to 4 different agents, I think it's the alliance and Leicester part that confuses them.

When you phone up there's an option to press if you have an A&L mortgage. I'd assumed, because of that, that they had different people to deal with the different types. But maybe not!

But all sorted now.

With what outcome? Did you get what you wanted?